Page:United States Statutes at Large Volume 102 Part 4.djvu/700

 102 STAT. 3670 26 USC 2101 "°^-

PUBLIC LAW 100-647—NOV. 10, 1988

(d) EFFECTIVE DATE.—The amendments made by this section shall apply to the estates of decedents dying after the date of the enactment of this Act. SEC. 5033. DISALLOWANCE OF MARITAL DEDUCTION WHERE SPOUSE IS NOT CITIZEN OF UNITED STATES. (a) ESTATE TAX.—

(1) IN GENERAL.—Section 2056 of the 1986 Code is amended by adding at the end thereof the following new subsection: "(d) DISALLOWANCE OF MARITAL DEDUCTION WHERE SURVIVING SPOUSE NOT UNITED STATES CITIZEN.—

"(1) IN GENERAL.—Except as provided in paragraph (2), if the surviving spouse of the decedent is not a citizen of the United States— "(A) no deduction shall be allowed under subsection (a), and "(B) section 2040(b) shall not apply. "(2) MARITAL DEDUCTION ALLOWED FOR CERTAIN TRANSFERS IN TRUST.—

"(A) IN GENERAL.—Paragraph (1) shall not apply to any property passing to the surviving spouse in a qualified domestic trust. "(B) PROPERTY PASSING OUTSIDE OF PROBATE ESTATE.—If

any property passes from the decedent to the surviving spouse of the decedent outside of the decedent's probate estate, for purposes of subparagraph (A), such property shall be treated as passing to such spouse in a qualii^ed domestic trust if such property is transferred to such a trust before the day on which the return of the tax imposed by section 2001 is made. "(3) ALLOWANCE OF CREDIT TO CERTAIN SPOUSES.—If—

"(A) property passes to the surviving spouse of the decedent (hereinafter in this paragraph referred to as the 'first decedent'), "(B) without regard to this subsection, a deduction would be allowable under subsection (a) with respect to such property, and "(C) such surviving spouse dies and the estate of such surviving spouse is subject to the tax imposed by section 2001, the Federal estate tax paid (or treated as paid under section 2056A(b)(6)) by the first decedent with respect to such property shall be allowed as a credit under section 2013 to the estate of such surviving spouse and the amount of such credit shall be determined under such section without regard to when the first decedent died." (2) TREATMENT OF QUALIFIED DOMESTIC TRUST.—Part IV

of

subchapter A of chapter 11 of the 1986 Code is amended by inserting aft«r section 2056 the following new section: "SEC. 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 requires that all trustees of the trust be individual citizens of the United States or domestic corporations.

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