
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document affected by Public Law 107-134 Section 103(b)(2)]
[Document affected by Public Law 107-16 Section 532(c)(5)]
[CITE: 26USC2053]

 
                     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
 
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(e) 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).

(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, Secs. 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.)


                               Amendments

    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 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.''

                  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.
