
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 107-16 Section 532(c)(8)]
[CITE: 26USC2106]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                    Subtitle B--Estate and Gift Taxes
 
                         CHAPTER 11--ESTATE TAX
 
           Subchapter B--Estates of Nonresidents Not Citizens
 
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.

(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.)


                               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 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.

                  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.
