(a) Treatment of expatriates A tax computed in accordance with the table contained in section 2001 is hereby imposed on the transfer of the taxable estate, determined as provided in section 2106, of every decedent nonresident not a citizen of the United States if the date of death occurs during a taxable year with respect to which the decedent is subject to tax under section 877(b).
Amended 1976, 1996, 2004
- 2004 Pub. L. 108-357 Pub. L. 108–357 reenacted heading without change and amended text of subsec. (a) generally, substituting provisions relating to imposition of tax on the transfer of the taxable estate of every decedent nonresident not a citizen of the United States if the date of death occurs during a taxable year with respect to which the decedent is subject to tax under section 877(b), for provisions relating to imposition of tax on the transfer of the taxable estate of every decedent nonresident not a citizen of the United States if, within the 10-year period ending with the date of death, such decedent lost United States citizenship, unless such loss did not have for one of its principal purposes the avoidance of taxes, and provisions describing individuals to be treated as having a principal purpose to avoid taxes.
- 1996 Pub. L. 104-191 Pub. L. 104–191, § 511(e)(1)(A), substituted “Treatment of expatriates” for “Rate of tax” in heading and amended text generally. Prior to amendment, text read as follows: “A tax computed in accordance with the table contained in section 2001 is hereby imposed on the transfer of the taxable estate, determined as provided in section 2106, of every decedent nonresident not a citizen of the United States dying after November 13, 1966, if after March 8, 1965, and within the 10-year period ending with the date of death such decedent lost United States citizenship, unless such loss did not have for one of its principal purposes the avoidance of taxes under this subtitle or subtitle A.”
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1902(a)(6), substituted “November 13, 1966” for “the date of enactment of this section” after “dying after”.
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(b) Gross estate For purposes of the tax imposed by subsection (a), the value of the gross estate of every decedent to whom subsection (a) applies shall be determined as provided in section 2103, except that—
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(1) if such decedent owned (within the meaning of section 958(a)) at the time of his death 10 percent or more of the total combined voting power of all classes of stock entitled to vote of a foreign corporation, and
(2) if such decedent owned (within the meaning of section 958(a)), or is considered to have owned (by applying the ownership rules of section 958(b)), at the time of his death, more than 50 percent of—
Amended 1996
- 1996 Pub. L. 104-191 Pub. L. 104–191, § 511(e)(1)(C), substituted “more than 50 percent of—” for “more than 50 percent of the total combined voting power of all classes of stock entitled to vote of such foreign corporation,” and added subpars. (A) and (B).
(A) the total combined voting power of all classes of stock entitled to vote of such corporation, or
(B) the total value of the stock of such corporation,
then that proportion of the fair market value of the stock of such foreign corporation owned (within the meaning of section 958(a)) by such decedent at the time of his death, which the fair market value of any assets owned by such foreign corporation and situated in the United States, at the time of his death, bears to the total fair market value of all assets owned by such foreign corporation at the time of his death, shall be included in the gross estate of such decedent. For purposes of the preceding sentence, a decedent shall be treated as owning stock of a foreign corporation at the time of his death if, at the time of a transfer, by trust or otherwise, within the meaning of sections 2035 to 2038, inclusive, he owned such stock.
(c) Credits
Amended 1976
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 2001(c)(1)(E)(ii), substituted provisions relating to unified credit for “The tax imposed by subsection (a) shall be credited with the amounts determined in accordance with section 2102.”
(1) Unified credit
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(A) In general A credit of $13,000 shall be allowed against the tax imposed by subsection (a).
(B) Limitation based on amount of tax The credit allowed under this paragraph shall not exceed the amount of the tax imposed by subsection (a).
(2) Credit for foreign death taxes
Amended 1996
- 1996 Pub. L. 104-191 Pub. L. 104–191, § 511(e)(1)(B), added par. (2) and redesignated former par. (2) as (3).
(A) In general The tax imposed by subsection (a) shall be credited with the amount of any estate, inheritance, legacy, or succession taxes actually paid to any foreign country in respect of any property which is included in the gross estate solely by reason of subsection (b).
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(B) Limitation on credit The credit allowed by subparagraph (A) for such taxes paid to a foreign country shall not exceed the lesser of—
(i) the amount which bears the same ratio to the amount of such taxes actually paid to such foreign country as the value of the property subjected to such taxes by such foreign country and included in the gross estate solely by reason of subsection (b) bears to the value of all property subjected to such taxes by such foreign country, or
Amended 1997
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 1602(g)(6)(A), substituted “such foreign country as the value of the property subjected to such taxes by such foreign country and” for “such foreign country in respect of property included in the gross estate as the value of the property”.
(ii) such property’s proportionate share of the excess of—
(I) the tax imposed by subsection (a), over
(II) the tax which would be imposed by section 2101 but for this section.
(C) Proportionate share In the case of property which is included in the gross estate solely by reason of subsection (b), such property’s proportionate share is the percentage which the value of such property bears to the total value of all property included in the gross estate solely by reason of subsection (b).
Amended 1997
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 1602(g)(6)(B), amended heading and text of subpar. (C) generally. Prior to amendment, text read as follows: “For purposes of subparagraph (B), a property’s proportionate share is the percentage of the value of the property which is included in the gross estate solely by reason of subsection (b) bears to the total value of the gross estate.”
(3) Other credits The tax imposed by subsection (a) shall be credited with the amounts determined in accordance with subsections (a) and (b) of section 2102. For purposes of subsection (a) of section 2102, sections 2012 and 2013 shall be applied as if the credit allowed under paragraph (1) were allowed under section 2010.
Amended 1996, 2001
- 2001 Pub. L. 107-16 Pub. L. 107–16 substituted “2012 and 2013” for “2011 to 2013, inclusive,”.
- 1996 Pub. L. 104-191 Pub. L. 104–191, § 511(e)(1)(B), added par. (2) and redesignated former par. (2) as (3).
(d) Burden of proof If the Secretary establishes that it is reasonable to believe that an individual’s loss of United States citizenship would, but for this section, result in a substantial reduction in the estate, inheritance, legacy, and succession taxes in respect of the transfer of his estate, the burden of proving that such loss of citizenship did not have for one of its principal purposes the avoidance of taxes under this subtitle or subtitle A shall be on the executor of such individual’s estate.
Amended 1996
- 1996 Pub. L. 104-191 Pub. L. 104–191, § 511(f)(2)(A), redesignated subsec. (e) as (d) and struck out former subsec. (d) which read as follows:
- 1996 “(d) Exception for Loss of Citizenship for Certain Causes.—Subsection (a) shall not apply to the transfer of the estate of a decedent whose loss of United States citizenship resulted from the application of section 301(b), 350, or 355 of the Immigration and Nationality Act, as amended (8 U.S.C. 1401(b), 1482, or 1487).”
(e) Cross reference For comparable treatment of long-term lawful permanent residents who ceased to be taxed as residents, see section 877(e).
Amended 1976, 1996
- 1996 Pub. L. 104-191 Pub. L. 104–191, § 511(f)(2)(A), added subsec. (e). Former subsec. (e) redesignated (d).
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.