"Adjusted value of the property situated in the foreign country, subjected to foreign death taxes, and included in the gross estate" (G) ÷ Value of entire gross estate, less charitable and marital deductions (H) * Gross Federal estate tax, less credits for State death taxes and gift tax (F)
The values used in this proportion are the values determined for the purpose of the Federal estate tax.
Any reduction described in paragraph (b)(1) or (b)(2) of this section on account of the marital deduction must proportionately take into account, if applicable, the limitation on the aggregate amount of the marital deduction contained in § 20.2056(a)-1(c) . See § 20.2014-3(c) , Example 3.
[($200,000 - $40,000 (factor G of the ratio stated at § 20.2014-3(a) ; see also § 20.2014-3(b)(1) )) ÷ ($1,000,000 - $40,000 (factor H of the ratio stated at § 20.2014-3(a) ))] * ($266,500 - $27,600) (factor F of the ratio stated at § 20.2014-3(a) ) = $39,816.67.
The lesser of this amount and the amount of the "first limitation" (computed under § 20.2014-2 ) is the credit for foreign death taxes.
Value of property situated in Country X | $200,000.00 | |
Less: | ||
Reduction described in § 20.2014-3(b)(1) | $25,000.00 | |
Reduction described in § 20.2014-3(b)(2) = [$175,000 (factor K of the ratio stated at § 20.2014-3 (b)(2) ) ÷ ($175,000 + $650,000 (factor L of the ratio stated at § 20.2014-3 (b)(2) ))] * $100,000 (factor J of the ratio stated at § 20.2014-3(b)(2) ) = | 21,212.12 | |
46,212.12 | ||
Factor "G" of the ratio | 153,787.88 |
[$153,787.88 (factor G of the ratio stated at § 20.2014-3(a) ; see also subdivision (ii) above) ÷ ($1,000,000 - $125,000 (factor H of the ratio stated at § 20.2014-3(a) ))] * ($242,450 - $24,480) (factor F of the ratio stated at § 20.2014-3(a) ) = $38,309.88.
Value of property situated in Country X. | $300,000 | |
Less: Reduction described in § 20.2014-3 (b)(1) determined as follows (see also end of § 20.2014-3(b) )- | ||
Total amount of bequests which qualify for the marital deduction: | ||
Specific bequest of Country X stock | $300,000 | |
Specific bequest of United States stock | 200,000 | |
500,000 | ||
Limitation on aggregate marital deduction under section 2056(c) | 400,000 | |
Part of specific bequest of Country X stock with respect to which the marital deduction is allowed-($400,000 ÷ $500,000 * $300,000) | 240,000 | |
Factor "G" of the ratio | 60,000 |
[$60,000 (factor G of the ratio stated at § 20.2014-3(a) ; see also subdivision (ii) above) ÷ ($850,000 - $40,000 - $400,000 (factor H of the ratio stated at § 20.2014-3(a) ))] * ($81,700 - $5,520) (factor F of the ratio stated at § 20.2014-3(a) ) = $11,148.29.
26 C.F.R. §20.2014-3