Internal Revenue Code:Sec. 2106. Taxable estate
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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 B - Estates of Nonresidents Not Citizens
Statute
Sec. 2106. Taxable estate
(a) Definition of taxable estate
For purposes of the tax imposed by section 2101, the value of the
taxable estate of every decedent nonresident not a citizen of the
United States shall be determined by deducting from the value of
that part of his gross estate which at the time of his death is
situated in the United States -
(1) Expenses, losses, indebtedness, and taxes
That proportion of the deductions specified in sections 2053
and 2054 (other than the deductions described in the following
sentence) which the value of such part bears to the value of his
entire gross estate, wherever situated. Any deduction allowable
under section 2053 in the case of a claim against the estate
which was founded on a promise or agreement but was not
contracted for an adequate and full consideration in money or
money's worth shall be allowable under this paragraph to the
extent that it would be allowable as a deduction under paragraph
(2) if such promise or agreement constituted a bequest.
(2) Transfers for public, charitable, and religious uses
(A) In general
The amount of all bequests, legacies, devises, or transfers
(including the interest which falls into any such bequest,
legacy, devise, or transfer as a result of an irrevocable
disclaimer of a bequest, legacy, devise, transfer, or power, if
the disclaimer is made before the date prescribed for the
filing of the estate tax return) -
(i) to or for the use of the United States, any State, any
political subdivision thereof, or the District of Columbia,
for exclusively public purposes;
(ii) to or for the use of any domestic corporation
organized and operated exclusively for religious, charitable,
scientific, literary, or educational purposes, including the
encouragement of art and the prevention of cruelty to
children or animals, no part of the net earnings of which
inures to the benefit of any private stockholder or
individual, which is not disqualified for tax exemption under
section 501(c)(3) by reason of attempting to influence
legislation, and which does not participate in, or intervene
in (including the publishing or distributing of statements),
any political campaign on behalf of (or in opposition to) any
candidate for public office; or
(iii) to a trustee or trustees, or a fraternal society,
order, or association operating under the lodge system, but
only if such contributions or gifts are to be used within the
United States by such trustee or trustees, or by such
fraternal society, order, or association, exclusively for
religious, charitable, scientific, literary, or educational
purposes, or for the prevention of cruelty to children or
animals, such trust, fraternal society, order, or association
would not be disqualified for tax exemption under section
501(c)(3) by reason of attempting to influence legislation,
and such trustee or trustees, or such fraternal society,
order, or association, does not participate in, or intervene
in (including the publishing or distributing of statements),
any political campaign on behalf of (or in opposition to) any
candidate for public office;
(B) Powers of appointment
Property includible in the decedent's gross estate under
section 2041 (relating to powers of appointment) received by a
donee described in this paragraph shall, for purposes of this
paragraph, be considered a bequest of such decedent.
(C) Death taxes payable out of bequests
If the tax imposed by section 2101, or any estate,
succession, legacy, or inheritance taxes, are, either by the
terms of the will, by the law of the jurisdiction under which
the estate is administered, or by the law of the jurisdiction
imposing the particular tax, payable in whole or in part out of
the bequests, legacies, or devises otherwise deductible under
this paragraph, then the amount deductible under this paragraph
shall be the amount of such bequests, legacies, or devises
reduced by the amount of such taxes.
(D) Limitation on deduction
The amount of the deduction under this paragraph for any
transfer shall not exceed the value of the transferred property
required to be included in the gross estate.
(E) Disallowance of deductions in certain cases
The provisions of section 2055(e) shall be applied in the
determination of the amount allowable as a deduction under this
paragraph.
(F) Cross references
(i) For option as to time for valuation for purposes of
deduction under this section, see section 2032.
(ii) For exemption of certain bequests for the benefit of
the United States and for rules of construction for certain
bequests, see section 2055(g).
(iii) For treatment of gifts and bequests to or for the use
of Indian tribal governments (or their subdivisions), see
section 7871.
(3) Marital deduction
The amount which would be deductible with respect to property
situated in the United States at the time of the decedent's death
under the principles of section 2056.
(b) Condition of allowance of deductions
No deduction shall be allowed under paragraphs (1) and (2) of
subsection (a) in the case of a nonresident not a citizen of the
United States unless the executor includes in the return required
to be filed under section 6018 the value at the time of his death
of that part of the gross estate of such nonresident not situated
in the United States.
Sources
(Aug. 16, 1954, ch. 736, 68A Stat. 398; Pub. L. 85-866, title I,
Sec. 30(d), Sept. 2, 1958, 72 Stat. 1631; Pub. L. 86-779, Sec.
4(c), Sept. 14, 1960, 74 Stat. 1000; Pub. L. 89-809, title I, Sec.
108(e), Nov. 13, 1966, 80 Stat. 1572; Pub. L. 91-172, title II,
Sec. 201(d)(2), (4)(B), Dec. 30, 1969, 83 Stat. 561; Pub. L.
94-455, title XIII, Sec. 1307(d)(1)(B)(iii), (C), title XIX, Sec.
1902(a)(5), (12)(A), title XX, Sec. 2001(c)(1)(F), Oct. 4, 1976, 90
Stat. 1727, 1805, 1852; Pub. L. 97-473, title II, Sec. 202(b)(6),
Jan. 14, 1983, 96 Stat. 2610; Pub. L. 99-514, title XIV, Sec.
1422(c), Oct. 22, 1986, 100 Stat. 2717; Pub. L. 100-203, title X,
Sec. 10711(a)(4), Dec. 22, 1987, 101 Stat. 1330-464; Pub. L.
100-647, title V, Sec. 5033(c), Nov. 10, 1988, 102 Stat. 3672; Pub.
L. 101-239, title VII, Sec. 7815(d)(3), Dec. 19, 1989, 103 Stat.
2415; Pub. L. 107-16, title V, Sec. 532(c)(8), June 7, 2001, 115
Stat. 75.)
Amendment of Section
AMENDMENT OF SUBSECTION (A)
Pub. L. 107-16, title V, Sec. 532(c)(8), (d), title IX, Sec.
901, June 7, 2001, 115 Stat. 75, 150, provided that, applicable
to estates of decedents dying, and generation-skipping transfers,
after Dec. 31, 2004, subsection (a) of this section is
temporarily amended by adding at the end the following new
paragraph:
(4) State death taxes
The amount which bears the same ratio to the State death taxes
as the value of the property, as determined for purposes of this
chapter, upon which State death taxes were paid and which is
included in the gross estate under section 2103 bears to the
value of the total gross estate under section 2103. For purposes
of this paragraph, the term ''State death taxes'' means the taxes
described in section 2011(a).
See Effective and Termination Dates of 2001 Amendment note
below.
Miscellaneous
AMENDMENTS
1989 - Subsec. (a)(3). Pub. L. 101-239 struck out ''allowed where
spouse is citizen'' after ''deduction'' in heading.
1988 - Subsec. (a)(3). Pub. L. 100-647 added par. (3).
1987 - Subsec. (a)(2)(A)(ii), (iii). Pub. L. 100-203 inserted
''(or in opposition to)'' after ''on behalf of''.
1986 - Subsec. (a)(2)(F)(ii). Pub. L. 99-514 substituted
''section 2055(g)'' for ''section 2055(f)''.
1983 - Subsec. (a)(2)(F). Pub. L. 97-473 substituted ''(i)'' and
''(ii)'' for ''(1)'' and ''(2)'', respectively, and added cl.
(iii).
1976 - Subsec. (a)(2)(A)(i). Pub. L. 94-455, Sec. 1902
(a)(12)(A), struck out ''Territory'' after ''any State''.
Subsec. (a)(2)(A)(ii). Pub. L. 94-455, Sec. 1307(d)(1)(B)(iii),
substituted ''which is not disqualified for tax exemption under
section 501(c)(3) by reason of attempting to influence
legislation'' for ''no substantial part of the activities of which
is carrying on propaganda, or otherwise attempting, to influence
legislation'' after ''stockholder or individual''.
Subsec. (a)(2)(A)(iii). Pub. L. 94-455, Sec. 1307(d)(1)(C),
substituted ''such trust, fraternal society, order, or association
would not be disqualified for tax exemption under section 501(c)(3)
by reason of attempting to influence legislation'' for ''no
substantial part of the activities of such trustee or trustees, or
of such fraternal society, order, or association, is carrying on
propaganda, or otherwise attempting, to influence legislation''
after ''children or animals''.
Subsec. (a)(2)(F). Pub. L. 94-455, Sec. 1902(a)(5)(A),
substituted ''Cross references'' for ''Other cross references''
after ''(F)'', in cl. (1) ''purposes of deduction under this
section'' for ''purpose of deduction under this paragraph'' after
''valuation for'', in cl. (2) provision for exemption of certain
bequests for benefit of United States and for rules of construction
for certain bequests, for provisions of cls. (2) to (11) relating
to bequests to; Library of Congress, Post Office Department, Office
of Naval Records and Library, National Park Service, Department of
State, Department of Justice, payment of tax on bequests of United
States obligations, Naval Academy, Naval Academy Museum, and
National Archives Trust Fund Board, respectively.
Subsec. (a)(3). Pub. L. 94-455, Sec. 2001(c)(1)(F), struck out
par. (3) relating to specific exemption in case of decedents
nonresidents not citizens.
Subsec. (c). Pub. L. 94-455, Sec. 1902(a)(5)(B), struck out
subsec. (c) relating to treatment of United States bonds in
determining gross estate of a decedent who was not engaged in
business in the United States at the time of his death.
1969 - Subsec. (a)(2)(A)(ii), (iii). Pub. L. 91-172, Sec.
201(d)(4)(B), inserted non-participation and non-intervention in
political campaigns as an additional qualification.
Subsec. (a)(2)(E). Pub. L. 91-172, Sec. 201(d)(2), substituted
substantive provisions for simple reference to sections 503 and 681
of this title in which such substantive provisions were formerly
set out.
1966 - Subsec. (a)(3). Pub. L. 89-809 substituted ''$30,000'' for
''$2,000'' as size of exemption in subpar. (A) and ''$30,000'' for
''$2,000'' as item (i) in formula set out in subpar. (B).
1960 - Subsec. (a)(3). Pub. L. 86-779 designated existing
provisions as subpar. (A) and added subpar. (B).
1958 - Subsec. (a)(2)(E). Pub. L. 85-866 substituted ''503'' for
''504''.
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 1989 AMENDMENT
Amendment by Pub. L. 101-239 effective, except as otherwise
provided, as if included in the provision of the Technical and
Miscellaneous Revenue Act of 1988, Pub. L. 100-647, to which such
amendment relates, see section 7817 of Pub. L. 101-239, set out as
a note under section 1 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 applicable to estates of decedents
dying after Nov. 10, 1988, see section 5033(d)(1) of Pub. L.
100-647, set out as a note under section 2056 of this title.
EFFECTIVE DATE OF 1987 AMENDMENT
Amendment by Pub. L. 100-203 applicable with respect to
activities after Dec. 22, 1987, see section 10711(c) of Pub. L.
100-203, set out as a note under section 170 of this title.
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by Pub. L. 99-514 applicable to transfers and
contributions made after Dec. 31, 1986, see section 1422(e) of Pub.
L. 99-514, set out as a note under section 2055 of this title.
EFFECTIVE DATE OF 1983 AMENDMENT
For effective date of amendment by Pub. L. 97-473, see section
204(3) of Pub. L. 97-473, set out as an Effective Date note under
section 7871 of this title.
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 1902(a)(5) of Pub. L. 94-455 applicable in
the case of estates of decedents dying after Oct. 4, 1976, see
section 1902(c)(1) of Pub. L. 94-455, set out as a note under
section 2011 of this title.
Amendment by section 2001(c)(1)(F) of Pub. L. 94-455 applicable
to estates of decedents dying after Dec. 31, 1976, see section
2001(d)(1) of Pub. L. 94-455, set out as a note under section 2001
of this title.
EFFECTIVE DATE OF 1969 AMENDMENT
Amendment by section 201(d)(2) of Pub. L. 91-172 applicable in
the case of decedents dying after Dec. 31, 1969, with specified
exceptions, see section 201(g)(4) of Pub. L. 91-172, set out as a
note under section 170 of this title.
Amendment by section 201(d)(4)(B) of Pub. L. 91-172 applicable to
gifts and transfers made after Dec. 31, 1969, see section 201(g)(4)
of Pub. L. 91-172, set out as a note under section 170 of this
title.
EFFECTIVE DATE OF 1966 AMENDMENT
Amendment by Pub. L. 89-809 applicable with respect to estates of
decedents dying after Nov. 13, 1966, see section 108(i) of Pub. L.
89-809, set out as a note under section 2101 of this title.
EFFECTIVE DATE OF 1960 AMENDMENT
Section 4(e)(2) of Pub. L. 86-779 provided that: ''The amendments
made by subsections (b) and (c) (enacting section 2209 of this
title and amending this section) shall apply with respect to
estates of decedents dying after the date of the enactment of this
Act (Sept. 14, 1960).''
APPLICATION OF AMENDMENTS BY SECTION 5033 OF PUB. L. 100-647 TO
ESTATES OF, OR GIFTS BY, NONCITIZEN AND NONRESIDENT INDIVIDUALS
For provisions directing that in the case of the estate of, or
gift by, an individual who was not a citizen or resident of the
United States but was a resident of a foreign country with which
the United States has a tax treaty with respect to estate,
inheritance, or gift taxes, the amendments made by section 5033 of
Pub. L. 100-647 shall not apply to the extent such amendments would
be inconsistent with the provisions of such treaty relating to
estate, inheritance, or gift tax marital deductions, but that in
the case of the estate of an individual dying before the date 3
years after Dec. 19, 1989, or a gift by an individual before the
date 3 years after Dec. 19, 1989, the requirement of the preceding
provision that the individual not be a citizen or resident of the
United States shall not apply, see section 7815(d)(14) of Pub. L.
101-239, set out as a note under section 2056 of this title.
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 170, 303, 508, 2011,
2012, 2013, 2032, 2053, 2101, 2107, 2108, 2701, 4947, 4948, 7871 of
this title; title 22 section 3307.
