Internal Revenue Code:Sec. 2053. Expenses, indebtedness, and taxes
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Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART IV - TAXABLE ESTATE
Statute
Sec. 2053. Expenses, indebtedness, and taxes
(a) General rule
For purposes of the tax imposed by section 2001, the value of the
taxable estate shall be determined by deducting from the value of
the gross estate such amounts -
(1) for funeral expenses,
(2) for administration expenses,
(3) for claims against the estate, and
(4) for unpaid mortgages on, or any indebtedness in respect of,
property where the value of the decedent's interest therein,
undiminished by such mortgage or indebtedness, is included in the
value of the gross estate,
as are allowable by the laws of the jurisdiction, whether within or
without the United States, under which the estate is being
administered.
(b) Other administration expenses
Subject to the limitations in paragraph (1) of subsection (c),
there shall be deducted in determining the taxable estate amounts
representing expenses incurred in administering property not
subject to claims which is included in the gross estate to the same
extent such amounts would be allowable as a deduction under
subsection (a) if such property were subject to claims, and such
amounts are paid before the expiration of the period of limitation
for assessment provided in section 6501.
(c) Limitations
(1) Limitations applicable to subsections (a) and (b)
(A) Consideration for claims
The deduction allowed by this section in the case of claims
against the estate, unpaid mortgages, or any indebtedness
shall, when founded on a promise or agreement, be limited to
the extent that they were contracted bona fide and for an
adequate and full consideration in money or money's worth;
except that in any case in which any such claim is founded on a
promise or agreement of the decedent to make a contribution or
gift to or for the use of any donee described in section 2055
for the purposes specified therein, the deduction for such
claims shall not be so limited, but shall be limited to the
extent that it would be allowable as a deduction under section
2055 if such promise or agreement constituted a bequest.
(B) Certain taxes
Any income taxes on income received after the death of the
decedent, or property taxes not accrued before his death, or
any estate, succession, legacy, or inheritance taxes, shall not
be deductible under this section.
(C) Certain claims by remaindermen
No deduction shall be allowed under this section for a claim
against the estate by a remainderman relating to any property
described in section 2044.
(D) Section 6166 interest
No deduction shall be allowed under this section for any
interest payable under section 6601 on any unpaid portion of
the tax imposed by section 2001 for the period during which an
extension of time for payment of such tax is in effect under
section 6166.
(2) Limitations applicable only to subsection (a)
In the case of the amounts described in subsection (a), there
shall be disallowed the amount by which the deductions specified
therein exceed the value, at the time of the decedent's death, of
property subject to claims, except to the extent that such
deductions represent amounts paid before the date prescribed for
the filing of the estate tax return. For purposes of this
section, the term ''property subject to claims'' means property
includible in the gross estate of the decedent which, or the
avails of which, would under the applicable law, bear the burden
of the payment of such deductions in the final adjustment and
settlement of the estate, except that the value of the property
shall be reduced by the amount of the deduction under section
2054 attributable to such property.
(d) Certain State and foreign death taxes
(1) General rule
Notwithstanding the provisions of subsection (c)(1)(B) of this
section, for purposes of the tax imposed by section 2001 the
value of the taxable estate may be determined, if the executor so
elects before the expiration of the period of limitation for
assessment provided in section 6501, by deducting from the value
of the gross estate the amount (as determined in accordance with
regulations prescribed by the Secretary) of -
(A) Any estate, succession, legacy, or inheritance tax
imposed by a State or the District of Columbia upon a transfer
by the decedent for public, charitable, or religious uses
described in section 2055 or 2106(a)(2), and
(B) any estate, succession, legacy, or inheritance tax
imposed by and actually paid to any foreign country, in respect
of any property situated within such foreign country and
included in the gross estate of a citizen or resident of the
United States, upon a transfer by the decedent for public,
charitable, or religious uses described in section 2055.
The determination under subparagraph (B) of the country within
which property is situated shall be made in accordance with the
rules applicable under subchapter B (sec. 2101 and following) in
determining whether property is situated within or without the
United States. Any election under this paragraph shall be
exercised in accordance with regulations prescribed by the
Secretary.
(2) Condition for allowance of deduction
No deduction shall be allowed under paragraph (1) for a State
death tax or a foreign death tax specified therein unless the
decrease in the tax imposed by section 2001 which results from
the deduction provided in paragraph (1) will inure solely for the
benefit of the public, charitable, or religious transferees
described in section 2055 or section 2106(a)(2). In any case
where the tax imposed by section 2001 is equitably apportioned
among all the transferees of property included in the gross
estate, including those described in sections 2055 and 2106(a)(2)
(taking into account any exemptions, credits, or deductions
allowed by this chapter), in determining such decrease, there
shall be disregarded any decrease in the Federal estate tax which
any transferees other than those described in sections 2055 and
2106(a)(2) are required to pay.
(3) Effect on credits for State and foreign death taxes of
deduction under this subsection
(A) Election
An election under this subsection shall be deemed a waiver of
the right to claim a credit, against the Federal estate tax,
under a death tax convention with any foreign country for any
tax or portion thereof in respect of which a deduction is taken
under this subsection.
(B) Cross references
See section 2011(d) for the effect of a deduction taken under
this subsection on the credit for State death taxes, and see
section 2014(f) for the effect of a deduction taken under this
subsection on the credit for foreign death taxes.
(e) Marital rights
For provisions treating certain relinquishments of marital
rights as consideration in money or money's worth, see section
2043(b)(2).
Sources
(Aug. 16, 1954, ch. 736, 68A Stat. 389; Feb. 20, 1956, ch. 63, Sec.
2, 70 Stat. 23; Pub. L. 85-866, title I, Sec. 102(c)(3), Sept. 2,
1958, 72 Stat. 1674; Pub. L. 86-175, Sec. 1, Aug. 21, 1959, 73
Stat. 396; Pub. L. 94-455, title XIX, Sec. 1902(a)(12) (B),
1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1806, 1834; Pub. L. 98-369,
div. A, title IV, Sec. 425(a)(2), title X, Sec. 1027(b), July 18,
1984, 98 Stat. 804, 1031; Pub. L. 100-647, title I, Sec.
1011A(g)(11), Nov. 10, 1988, 102 Stat. 3482; Pub. L. 105-34, title
V, Sec. 503(b)(1), title X, Sec. 1073(b)(3), Aug. 5, 1997, 111
Stat. 853, 948; Pub. L. 107-16, title V, Sec. 532(c)(5), June 7,
2001, 115 Stat. 74; Pub. L. 107-134, title I, Sec. 103(b)(2), Jan.
23, 2002, 115 Stat. 2431.)
Amendment of Section
AMENDMENT OF SUBSECTION (D)
Pub. L. 107-16, title V, Sec. 532(c)(5), (d), title IX, Sec.
901, June 7, 2001, 115 Stat. 74, 75, 901, provided that,
applicable to estates of decedents dying, and generation-skipping
transfers, after Dec. 31, 2004, subsection (d) of this section is
temporarily amended to read as follows:
(d) Certain foreign death taxes
(1) In general
Notwithstanding the provisions of subsection (c)(1)(B), for
purposes of the tax imposed by section 2001, the value of the
taxable estate may be determined, if the executor so elects
before the expiration of the period of limitation for assessment
provided in section 6501, by deducting from the value of the
gross estate the amount (as determined in accordance with
regulations prescribed by the Secretary) of any estate,
succession, legacy, or inheritance tax imposed by and actually
paid to any foreign country, in respect of any property situated
within such foreign country and included in the gross estate of a
citizen or resident of the United States, upon a transfer by the
decedent for public, charitable, or religious uses described in
section 2055. The determination under this paragraph of the
country within which property is situated shall be made in
accordance with the rules applicable under subchapter B (sec.
2101 and following) in determining whether property is situated
within or without the United States. Any election under this
paragraph shall be exercised in accordance with regulations
prescribed by the Secretary.
(2) Condition for allowance of deduction
No deduction shall be allowed under paragraph (1) for a foreign
death tax specified therein unless the decrease in the tax
imposed by section 2001 which results from the deduction provided
in paragraph (1) will inure solely for the benefit of the public,
charitable, or religious transferees described in section 2055 or
section 2106(a)(2). In any case where the tax imposed by section
2001 is equitably apportioned among all the transferees of
property included in the gross estate, including those described
in sections 2055 and 2106(a)(2) (taking into account any
exemptions, credits, or deductions allowed by this chapter), in
determining such decrease, there shall be disregarded any
decrease in the Federal estate tax which any transferees other
than those described in sections 2055 and 2106(a)(2) are required
to pay.
(3) Effect on credit for foreign death taxes of deduction under
this subsection
(A) Election
An election under this subsection shall be deemed a waiver of
the right to claim a credit, against the Federal estate tax,
under a death tax convention with any foreign country for any
tax or portion thereof in respect of which a deduction is taken
under this subsection.
(B) Cross reference
See section 2014(f) for the effect of a deduction taken under
this paragraph on the credit for foreign death taxes.
See Effective and Termination Dates of 2001 Amendment note
below.
Miscellaneous
AMENDMENTS
2002 - Subsec. (d)(3)(B). Pub. L. 107-134 substituted ''section
2011(d)'' for ''section 2011(e)''.
1997 - Subsec. (c)(1)(B). Pub. L. 105-34, Sec. 1073(b)(3), struck
out at end ''This subparagraph shall not apply to any increase in
the tax imposed by this chapter by reason of section 4980A(d).''
Subsec. (c)(1)(D). Pub. L. 105-34, Sec. 503(b)(1), added subpar.
(D).
1988 - Subsec. (c)(1)(B). Pub. L. 100-647, inserted at end ''This
subparagraph shall not apply to any increase in the tax imposed by
this chapter by reason of section 4980A(d).''
1984 - Subsec. (c)(1)(C). Pub. L. 98-369, Sec. 1027(b), added
subpar. (C).
Subsec. (e). Pub. L. 98-369, Sec. 425(a)(2), substituted ''For
provisions treating certain relinquishments of marital rights as
consideration in money or money's worth, see section 2043(b)(2)''
for ''For provisions that relinquishment of marital rights shall
not be deemed a consideration 'in money or money's worth,' see
section 2043(b).''
1976 - Subsec. (d)(1). Pub. L. 94-455 struck out ''or his
delegate'' after ''Secretary'' in provisions preceding subpar. (A)
and following subpar. (B) and struck out ''or Territory'' after ''a
State'' in subpar. (A).
1959 - Subsec. (d). Pub. L. 86-175 inserted a reference to
foreign death taxes in heading of subsection and par. (3) and in
text of par. (2), redesignated provisions of par. (1) as par.
(1)(A) and sentence pertaining to exercise of privilege of
election, added par. (2) and sentence for determining location of
property, redesignated provisions of par. (3) as par. (3)(B) in
part, and added par. (3)(A) and the part of (B) relating to foreign
death taxes.
1958 - Subsec. (d)(1). Pub. L. 85-866 struck out ''or any
possession of the United States,'' after ''District of Columbia,''.
1956 - Subsecs. (d), (e). Act Feb. 20, 1956, added subsec. (d)
and redesignated former subsec. (d) as (e).
EFFECTIVE DATE OF 2002 AMENDMENT
Amendment by Pub. L. 107-134 applicable to estates of decedents
dying on or after Sept. 11, 2001, and, in the case of individuals
dying as a result of the Apr. 19, 1995, terrorist attack, dying on
or after Apr. 19, 1995, with provisions relating to waiver of
limitations, see section 103(d) of Pub. L. 107-134, set out as a
note under section 2011 of this title.
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Amendment by Pub. L. 107-16 applicable to estates of decedents
dying, and generation-skipping transfers, after Dec. 31, 2004, see
section 532(d) of Pub. L. 107-16, set out as a note under section
2011 of this title.
Amendment by Pub. L. 107-16 inapplicable to estates of decedents
dying, gifts made, or generation skipping transfers, after Dec. 31,
2010, and the Internal Revenue Code of 1986 to be applied and
administered to such estates, gifts, and transfers as if such
amendment had never been enacted, see section 901 of Pub. L.
107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by section 503(b)(1) of Pub. L. 105-34 applicable to
estates of decedents dying after Dec. 31, 1997, with special rule
in case of estate of any decedent dying before Jan. 1, 1998, with
respect to which there is an election under section 6166 of this
title, see section 503(d) of Pub. L. 105-34, set out as a note
under section 163 of this title.
Amendment by section 1073(b)(3) of Pub. L. 105-34 applicable to
estates of decedents dying after Dec. 31, 1996, see section 1073(c)
of Pub. L. 105-34, set out as an Effective Date of Repeal note
under section 4980A of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 effective, except as otherwise
provided, as if included in the provision of the Tax Reform Act of
1986, Pub. L. 99-514, to which such amendment relates, see section
1019(a) of Pub. L. 100-647, set out as a note under section 1 of
this title.
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by section 425(a)(2) of Pub. L. 98-369 applicable to
estates of decedents dying after July 18, 1984, see section
425(c)(1) of Pub. L. 98-369, set out as a note under section 2043
of this title.
Section 1027(c) of Pub. L. 98-369 provided that: ''The amendments
made by this section (amending this section and section 2056 of
this title) shall take effect as if included in the amendment made
by section 403 of the Economic Recovery Tax Act of 1981 (section
403 of Pub. L. 97-34, see Effective Date of 1981 Amendment note set
out under section 2056 of this title).''
EFFECTIVE DATE OF 1959 AMENDMENT
Section 4 of Pub. L. 86-175 provided that: ''The amendments made
by the preceding sections of this Act (amending this section and
sections 2011 and 2014 of this title) shall apply with respect to
the estates of decedents dying on or after July 1, 1955.''
EFFECTIVE DATE OF 1958 AMENDMENT
Amendment by Pub. L. 85-866 applicable to estates of decedents
dying after Sept. 2, 1958, see section 102(d) of Pub. L. 85-866,
set out as a note under section 2011 of this title.
EFFECTIVE DATE OF 1956 AMENDMENT
Section 4 of act Feb. 20, 1956, as amended by act Oct. 22, 1986,
Pub. L. 99-514, Sec. 2, 100 Stat. 2095, provided that: ''The
amendments to the Internal Revenue Code of 1986 (formerly I.R.C.
1954) made by sections 2 and 3 of this Act (amending this section
and section 2011 of this title), and provisions having the same
effect as this amendment, which shall be considered to be included
in chapter 3 of the Internal Revenue Code of 1939, shall apply to
the estates of all decedents dying after December 31, 1953.''
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 213, 303, 642, 2011,
2013, 2014, 2032A, 2043, 2057, 2106, 2622, 6166, 7481 of this
title.
