Page:United States Statutes at Large Volume 73.djvu/435

 73 S T A T. ] "(2)

PUBLIC LAW 86-175-AUG. 21, 1959

397

CONDITION FOR ALLOWANCE OF DEDUCTION.—No deduction

shall be allowed under paragraph (1) for a State death tax or a foreign death tax specified therein unless the decrease in the tax imposed by section 2001 which results from the deduction esAstat. 373. 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). I n any case where the tax imposed ^^^^A Stat. 390, 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 CREDITS FOR STATE AND FOREIGN DEATH TAXES OF DEDUCTION UNDER THIS SUBSECTION.—

" (A) ELECTION.—An election under this subsection shall be deemed a waiver of the right to claim a credit, against the Federal estate tax, under a death tax convention with any foreign country for any tax or portion thereof in respect of which a deduction is taken under this subsection. "(B)

CROSS REFERENCES.—

"See section 2011(e) for the effect of a deduction taken under this subsection on the credit for State death taxes, and see section 2014(f) for the effect of a deduction taken under this subsection on the credit for foreign death taxes." SEC. 2. Section 2014 of the Internal Revenue Code of 1954 (relating _ 68A Stat. 378; 72 Stat. 1674. to credit for foreign death taxes) is amended by relettering subsec- '" " tion (f) as subsection (g) and by inserting after subsection (e) the following new subsection: " (f) ADDITIONAL LIMITATION I N CASES INVOLVING A DEDUCTION UNDER SECTION 2053(d).—In any case where a deduction is allowed

under section 2053(d) for an estate, succession, legacy, or inheritance tax imposed by and actually paid to any foreign country upon a transfer by the decedent for public, charitable, or religious uses described in section 2055, the property described in subparagraphs (A), (B), and (C) of paragraphs (1) and (2) of subsection (b) of this section shall not include any property in respect of which such deduction is allowed under section 2053(d). " SEC. 3. Section 2011(e) of the Internal Revenue Code of 1954 (relating to limitation on credit for State death taxes) is amended— (1) by striking out "imposed upon a transfer" and inserting in lieu thereof "imposed by a State or Territory or the District of Columbia upon a transfer"; (2) by striking out "for which a deduction" in paragraph (1) and inserting in lieu thereof "for which such deduction"; (3) by striking out "the deduction authorized by" each place it appears in paragraph (2) and inserting in lieu thereof "such deduction authorized by". SEC. 4. The amendments made by the preceding sections of this Act shall apply with respect to the estates of decedents dying on or after July 1, 1955. Approved August 21, 1959.

70 Stat. 2 3.

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