§ 2056A. Qualified domestic trust
(a)
Qualified domestic trust defined
For purposes of this section and section
2056
(d), the term “qualified domestic trust” means, with respect to any decedent, any trust if—
(1)
the trust instrument—
(b)
Tax treatment of trust
(1)
Imposition of estate tax
There is hereby imposed an estate tax on—
(2)
Amount of tax
(A)
In general
In the case of any taxable event, the amount of the estate tax imposed by paragraph (1) shall be the amount equal to—
(i)
the tax which would have been imposed under section
2001 on the estate of the decedent if the taxable estate of the decedent had been increased by the sum of—
(ii)
the tax which would have been imposed under section
2001 on the estate of the decedent if the taxable estate of the decedent had been increased by the amount referred to in clause (i)(II).
(B)
Tentative tax where tax of decedent not finally determined
(i)
In general
If the tax imposed on the estate of the decedent under section
2001 is not finally determined before the taxable event, the amount of the tax imposed by paragraph (1) on such event shall be determined by using the highest rate of tax in effect under section 2001 as of the date of the decedent’s death.
(ii)
Refund of excess when tax finally determined
If—
(II)
the tax determined under subparagraph (A) on the basis of the final determination of the tax imposed by section
2001 on the estate of the decedent,
such excess shall be allowed as a credit or refund (with interest) if claim therefor is filed not later than 1 year after the date of such final determination.
(C)
Special rule where decedent has more than 1 qualified domestic trust
If there is more than 1 qualified domestic trust with respect to any decedent, the amount of the tax imposed by paragraph (1) with respect to such trusts shall be determined by using the highest rate of tax in effect under section 2001 as of the date of the decedent’s death (and the provisions of paragraph (3)(B) shall not apply) unless, pursuant to a designation made by the decedent’s executor, there is 1 person—
(3)
Certain lifetime distributions exempt from tax
(4)
Tax where trust ceases to qualify
If any qualified domestic trust ceases to meet the requirements of paragraphs (1) and (2) of subsection (a), the tax imposed by paragraph (1) shall apply as if the surviving spouse died on the date of such cessation.
(5)
Due date
(A)
Tax on distributions
The estate tax imposed by paragraph (1)(A) shall be due and payable on the 15th day of the 4th month following the calendar year in which the taxable event occurs; except that the estate tax imposed by paragraph (1)(A) on distributions during the calendar year in which the surviving spouse dies shall be due and payable not later than the date on which the estate tax imposed by paragraph (1)(B) is due and payable.
(6)
Liability for tax
Each trustee shall be personally liable for the amount of the tax imposed by paragraph (1). Rules similar to the rules of section
2204 shall apply for purposes of the preceding sentence.
(8)
Lien for tax
For purposes of section
6324, any tax imposed by paragraph (1) shall be treated as an estate tax imposed under this chapter with respect to a decedent dying on the date of the taxable event (and the property involved shall be treated as the gross estate of such decedent).
(9)
Taxable event
The term “taxable event” means the event resulting in tax being imposed under paragraph (1).
(10)
Certain benefits allowed
(A)
In general
If any property remaining in the qualified domestic trust on the date of the death of the surviving spouse is includible in the gross estate of such spouse for purposes of this chapter (or would be includible if such spouse were a citizen or resident of the United States), any benefit which is allowable (or would be allowable if such spouse were a citizen or resident of the United States) with respect to such property to the estate of such spouse under section
2014,
2032,
2032A,
2055,
2056,
2058, or
6166 shall be allowed for purposes of the tax imposed by paragraph (1)(B).
(B)
Section
303
If the estate of the surviving spouse meets the requirements of section
303 with respect to any property described in subparagraph (A), for purposes of section
303, the tax imposed by paragraph (1)(B) with respect to such property shall be treated as a Federal estate tax payable with respect to the estate of the surviving spouse.
(11)
Special rule where distribution tax paid out of trust
For purposes of this subsection, if any portion of the tax imposed by paragraph (1)(A) with respect to any distribution is paid out of the trust, an amount equal to the portion so paid shall be treated as a distribution described in paragraph (1)(A).
(12)
Special rule where spouse becomes citizen
If the surviving spouse of the decedent becomes a citizen of the United States and if—
(A)
such spouse was a resident of the United States at all times after the date of the death of the decedent and before such spouse becomes a citizen of the United States,
(B)
no tax was imposed by paragraph (1)(A) with respect to any distribution before such spouse becomes such a citizen, or
(C)
such spouse elects—
(i)
to treat any distribution on which tax was imposed by paragraph (1)(A) as a taxable gift made by such spouse for purposes of—
(II)
determining the amount of the tax imposed by section
2501 on actual taxable gifts made by such spouse during the year in which the spouse becomes a citizen or any subsequent year, and
(ii)
to treat any reduction in the tax imposed by paragraph (1)(A) by reason of the credit allowable under section
2010 with respect to the decedent as a credit allowable to such surviving spouse under section
2505 for purposes of determining the amount of the credit allowable under section
2505 with respect to taxable gifts made by the surviving spouse during the year in which the spouse becomes a citizen or any subsequent year,
paragraph (1)(A) shall not apply to any distributions after such spouse becomes such a citizen (and paragraph (1)(B) shall not apply).
(13)
Coordination with section
1015
For purposes of section
1015, any distribution on which tax is imposed by paragraph (1)(A) shall be treated as a transfer by gift, and any tax paid under paragraph (1)(A) shall be treated as a gift tax.
(14)
Coordination with terminable interest rules
Any interest in a qualified domestic trust shall not be treated as failing to meet the requirements of paragraph (5) or (7) of section
2056
(b) merely by reason of any provision of the trust instrument permitting the withholding from any distribution of an amount to pay the tax imposed by paragraph (1) on such distribution.
(15)
No tax on certain distributions
No tax shall be imposed by paragraph (1) on any distribution to the surviving spouse to the extent such distribution is to reimburse such surviving spouse for any tax imposed by subtitle A on any item of income of the trust to which such surviving spouse is not entitled under the terms of the trust.
(d)
Election
An election under this section with respect to any trust shall be made by the executor on the return of the tax imposed by section
2001. Such an election, once made, shall be irrevocable. No election may be made under this section on any return if such return is filed more than one year after the time prescribed by law (including extensions) for filing such return.
(e)
Regulations
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations under which there may be treated as a qualified domestic trust any annuity or other payment which is includible in the decedent’s gross estate and is by its terms payable for life or a term of years.