The U.S. Tax Court, in a Sept. 7 decision dealing with spouses who died three months apart, held that the Code Sec. 2013(b) and Code Sec. 2013(c) limitations applied to the IRS's Sec. 2013(a) credit for tax on prior transfers, and that the estate of the second spouse to die could not claim the credit for state estate tax paid by the estate of the first spouse to die, according to the Thomson Reuters “Estate Planning Alert” for October.
In addition, the alert reported, the Tax Court also held on the facts that the protective Qualified Terminable Interest Property Trust (QTIP) claim filed by the estate of the first spouse to die was untimely.
The rulings came in Estate of Lucien J. Le Caer and Estate of Marie L. Le Caer, (2010) 135 TC No. 14).
According to the alert, Code Sec. 2013(a) provides for a credit against estate tax liability of a decedent's estate where the decedent received property in a transfer from a person who died within 10 years before, or two years after, the decedent's death, and the transfer is subject to estate tax in the transferor's estate. If the transferor died within two years of the death of the decedent, the decedent's estate may claim as a credit the amount determined under Code Sec. 2013(b) and Code Sec. 2013(c).