{"data":{"id":"us/26-cfr-20.2014-7","jurisdiction":"us","citation":"26 CFR 20.2014-7","heading":"-7 Limitation on credit if a deduction for foreign death taxes is allowed under section 2053(d).","body":"If a deduction is allowed under section 2053(d) for foreign death taxes paid with respect to a charitable gift, the credit for foreign death taxes is subject to special limitations. In such a case the property described in subparagraphs (A), (B), and (C) of paragraphs (1) and (2) of section 2014(b) shall not include any property with respect to which a deduction is allowed under section 2053(d). The application of this section may be illustrated by the following example:\nExample.\nThe decedent, a citizen of the United States, died July 1, 1955, leaving a gross estate of $1,200,000 consisting of: Shares of stock issued by United States corporations, valued at $600,000; bonds issued by the United States Government physically located in the United States, valued at $300,000; and shares of stock issued by a Country X corporation, valued at $300,000. Expenses, indebtedness, etc., amounted to $40,000. The decedent made specific bequests of $400,000 of the United States corporation stock to a niece and $100,000 of the Country X corporation stock to a nephew. The residue of his estate was left to charity. There is no death tax convention in existence between the United States and Country X. The Country X tax imposed was at a 50-percent rate on all beneficiaries. A State inheritance tax of $20,000 was imposed on the niece and nephew. The decedent did not provide in his will for the payment of the death taxes, and under local law the Federal estate tax is payable from the general estate, the same as administration expenses.\nDistribution of the Estate\nGross estate $1,200,000.00\nDebts and charges $40,000.00\nBequest of U.S. corporation stock to niece 400,000.00\nBequest of country X corporation stock to nephew 100,000.00\nNet Federal estate tax 136,917.88\n676,917.88\nResidue before country X tax 523,082.12\nCountry X succession tax on charity 100,000.00\nCharitable deduction 423,082.12\nTaxable Estate and Federal Estate Tax\nGross estate 1,200,000.00\nDebts and charges 40,000.00\nDeduction of foreign death tax under section 2053(d) 100,000.00\nCharitable deduction 423,082.12\nExemption 60,000.00\n623,082.12\nTaxable estate 576,917.88\nGross estate tax 172,621.26\nCredit for State death taxes 15,476.72\nGross estate tax less credit for State death taxes 157,144.54\nCredit for foreign death taxes 20,226.66\nNet Federal estate tax 136,917.88\nCredit for Foreign Death Taxes\ncountry x tax\nSuccession tax on nephew:\nValue of stock of country X corporation 100,000\nTax (50% rate) $50,000\nSuccession tax on charity:\nValue of stock of country X corporation 200,000\nTax (50% rate) 100,000\ncomputation of exclusion under section 2014(b)\nValue of situated in country X 300,000\nValue of property in respect of which a deduction is allowed under section 2053(d) 200,000\nValue of property situated within country X, subjected to tax, and included in gross estate as limited by section 2014(f) 100,000\nFirst Limitation, § 28.2014-2(a)\n$100,000 (factor C of the ratio stated at § 20.2014-2(a)) ÷ $100,000 + $200,000 (factor D of the ratio stated at § 20.2014 2(a) × $50,000 + $100,000) (factor B of the ratio stated at § 20.2014-2(a)) = $50,000.00\nSecond Limitation, § 28.2014-3(a)\n$100,000 (factor G of the ratio stated at § 20.2014-3(a)) (as limited by section 2014(f)) ÷ $1,200,000 − $423,082.12 (factor H of the ratio stated at § 20.2014 3(a) × $172,621.26 − $15,476.72) (factor F of the ratio stated at § 20.2014-3(a)) = $20,226.66Z","path":["Title 26—Internal Revenue","CHAPTER I—INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY","SUBCHAPTER B—ESTATE AND GIFT TAXES","PART 20—ESTATE TAX; ESTATES OF DECEDENTS DYING AFTER AUGUST 16, 1954"],"source_url":"https://www.ecfr.gov/api/versioner/v1/full/2026-08-25/title-26.xml","current_through":"2026-08-25","vintage":"","retrieved_at":"2026-08-27T02:25:11Z","sha256":"9b1da5c0acd1cf142a169e046d117c9b5303235b99158e6440930e46c22cf8f4","source_id":"us-cfr","stale":true,"prev":"us/26-cfr-20.2014-6","next":"us/26-cfr-20.2015-1"},"notice":"GroundRules: Original legal text. Not legal advice."}