msmap wrote:

- quote -

Note that if there is any other IRD item, then not all of
the estate tax will be attributable to the IRA even if the
removal of just the IRA causes the estate tax to recompute
as zero.

Assuming that the only IRD item is the IRA (otherwise, you
have to prorate to find the amount attributable to the IRA
and use that amount instead of the entire estate tax
amount), you will have a itemized deduction on schedule A
NOT subject to the 2%-of-AGI floor for the amount of the
estate tax (on the IRA) that bears the relationship of the
amount withdrawn from the IRA to the amount listed on the
estate tax return as the value of the IRA (less any post-tax
basis it might have).

Note that a surviving spouse in general won't get an estate
tax deduction (because of the estate marital deduction), but
it is possible (with enough assets passing to others).

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"msmap" <msmap[at]houston.rr.com> wrote:

- quote -

I think you are confused. What you are talking about is a
deduction not a credit. The deduction applies to only the
amount of *federal* estate tax paid attributable to the
inclusion of IRD in the estate tax base for the decedent's
estate.

See IRC 691(c) and Regs. §1.691(c)-1 for the details.

Drew Edmundson, CPA (NC)

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- quote -

The deduction for federal estate tax attributable to IRD is
an itemized deduction on Schedule A, not an offset against
other income. And you would only claim that deduction as
you received the income that generated the tax in the first
place. You said you have IRA's - if you are not taking the
entire IRA distribution in one year, you would not be
entitled to claim the entire federal estate tax in one year
- it must be apprortioned. So if you are taking the IRA
distributions over your life expectancy and that life
expectancy is 20 years, you would have 1/20 of the $240,000
each year as an itemized deduction.

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I have an estate tax bill of $240,000+. When we deduct the
IRA's the estate tax bill goes to $0. So my question is,
with income with respect to decedent saying I can take the
difference between the two values as a deduction against my
own personal income, how long / how much can I deduct each
year? My personal tax bill is usually only around $20K per
year so would I get a $220,000 refund in one year or just
not have to pay any taxes until the deduction is used up?

All help with this subject is greatly appreciated.

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