§ 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—
(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.
(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 foreign death taxes
(1)
In general
Notwithstanding the provisions of subsection (c)(1)(B), 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 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 this paragraph 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 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 credit for foreign death taxes of deduction under this subsection