Cal. Code Regs. tit. 18 § 13402.1

Current through Register 2024 Notice Reg. No. 50, December 13, 2024

Section 13402.1 - Method of Computation

(a) Decedents Dying Prior to 5:15 p.m., September 26, 1977--In General. The inheritance tax is ordinarily computed as follows:

(1) Determine the value of all property subject to the Inheritance Tax Law transferred to the particular transferee under the decedent's will or pursuant to the laws of succession. For the valuation of property, see Sections 13951 through 13956.

(2) Deduct from the value determined pursuant to subdivision (1) the total amount of all allowable deductions provided in Revenue and Taxation Code Sections 13981 through 13990, to which the transferee is entitled, to arrive at the clear market value. As to deductions, see Sections 13982 through 13988.6.

(3) Determine the value of all property subject to the Inheritance Tax Law included in any transfer to the transferee effected by any means other than the decedent's will or the laws of succession (as, for example, by a taxable transfer during the life of the decedent, or by the passage to the transferee of property held in joint tenancy, or by the payment to the transferee of proceeds of insurance on the life of the decedent), and make any proper deduction therefrom to arrive at the clear market value.

(4) Add the result determined pursuant to subdivision (3) to the result determined pursuant to subdivision (2).

(5) Deduct from the sum determined pursuant to subdivision (4) the exemptions provided in Revenue and Taxation Code Sections 13801 through 13803, and the marital exemption effective before January 1, 1976, in Revenue and Taxation Code Section 13805, to which the transferee is entitled. As to the specific exemptions, see Sections 13801 through 13801.3. As to the marital exemption or exclusion of separate property, see Section 13805.

(6) Compute the tax by applying to the result determined pursuant to subdivision (5) the same rate of taxation (see Revenue and Taxation Code Sections 13404 through 13406) which would have been applicable had the exemptions not been allowed. See also Section 13403. As to rates of taxation, see also Sections 13403.1 and 13403.2.

(b) Decedents Dying on or After 5:15 p.m., September 26, 1977--In General.

(3) Determine the value of all property subject to the Inheritance Tax Law included in any transfer to the transferee effected by any means other than the decedent's will or the laws of succession (as, for example, by a taxable transfer during the life of the decedent, or by the passage to the transferee of property held in joint tenancy or by the payment to the transferee of proceeds of insurance on the life of the decedent), and make any proper deductions therefrom to arrive at the clear market value.

(4) Add the result determined pursuant to subdivision (3) to the results determined pursuant to subdivision (2).

(5) Add to the sum determined pursuant to subdivision (4) the date of gift value of net gifts which are not otherwise subject to inheritance tax made by the decedent during his lifetime after December 31, 1976, to the transferee.

(6) Deduct from the sum determined pursuant to subdivision (5) the specific exemption provided for in Revenue and Taxation Code Sections 13801 through 13803 to which the transferee is entitled.

(7) Compute the tentative tax by applying to the result determined pursuant to subdivision (6) the same rate of taxation (see Revenue and Taxation Code Sections 13404 through 13406) which would have applied had the specific exemption not been allowed.

(8) Determine the total date of gift value, less any applicable annual exclusion, of all gifts made during lifetime after December 31, 1976, from the decedent to the transferee and compute the tax payable under the Gift Tax Law on the amount thus determined, at the rates and exemption in effect at date of death, in the same manner as set forth in subdivisions (6) and (7), i.e., deduct from the total thus determined the specific exemption to which the transferee is entitled at date of death, and compute the tax by applying to the result thus determined the same rate of taxation which would have applied had the exemption not been allowed.

(9) Subtract the tax on prior net gifts determined pursuant to subdivision (8) from the tentative tax determined pursuant to subdivision (7). The difference is the amount of inheritance tax due with respect to each transferee, respectively.

Cal. Code Regs. Tit. 18, § 13402.1

1. Amendment of subsection (b), and new subsection (c) filed 3-8-79; effective thirtieth day thereafter (Register 79, No. 10).
2. Repealer of subsection (b) and amendment of subsection (c) filed 2-28-80; effective thirtieth day thereafter (Register 80, No. 9).

Note: Authority cited: Section 14740, Revenue and Taxation Code. Reference: Section 13402, Revenue and Taxation Code, and Stats. 1979, Ch. 1005.