Section 9-3702. COMPUTATION OF TAX

 

3702.1The amount of the federal credit shall be construed to take full advantage of the maximum state death tax credit allowable under the laws of the United States.

 

3702.2In determining the maximum amount of the allowable federal credit, it shall be presumed that the maximum allowable federal credit determined in accordance with §2011(b) of the Internal Revenue Code subject to the limitations of §§ 2011(e) and (f) was claimed and that all other requirements of § 2011 were satisfied. Failure to claim the maximum amount of the federal credit on the federal estate tax return shall not affect the amount of the District estate tax due.

 

3702.3For resident decedents owning no real or tangible personal property located outside the District, the District estate tax shall equal the federal credit (determined in accordance with the Act and §§ 3702.1 and 3702.2 of this chapter.

 

Example: The decedent was domiciled in the District with all of the decedent's property located in the District. The value of the decedent's total gross estate is nine hundred twenty thousand dollars ($920,000) and the allowable deductions are one hundred seventy thousand dollars ($170,000). The allowable credit for state death taxes ("federal credit') is twenty thousand and four hundred dollars ($20,400). Consequently, the District estate tax due is twenty thousand and four hundred dollars ($20,400).

		Value
Decedent's Property:
D.C. real property	$500.000
Tangible personal property	135,000
Intangible personal property	285,000
Total gross estate		$920,000
Total allowable deductions		170,000
Taxable estate		750,000
Gross federal estate tax		248,300
Allowable unified credit		192,800
Allowable credit for state death taxes		20,400
("federal credit")
District estate tax due		20,400

 

3702.4For resident decedents owning property located outside the District, the District estate tax shall equal the federal credit (determined in accordance with the Act and §§ 3702.1 and 3702.2) reduced by the lessor of one of the following:

 

(a) The amount of death tax paid to any other state that qualifies for the credit; or

 

(b) An amount computed under the following formula:

 

Federal credit	X	Value of the gross estate subject to death tax in the other state (applying District law)
		The value of the decedent's gross estate

 

Example: The decedent resided in the District but owned a summer beach house in Maryland. The value of her gross estate is one million four hundred fifteen thousand dollars ($1,415,000) and the allowable deductions are four hundred fifteen thousand dollars ($415,000). The allowable credit for state death taxes ("federal credit") is thirty-three thousand two hundred dollars ($ 33,200). The District estate tax will be thirty-three thousand two hundred dollars ($33,200) reduced by the lesser of the tax actually paid by the estate to Maryland or the amount allowed by statute. In this case, the thirty-three thousand two hundred dollars ($33,200) is reduced by the statutory amount of eleven thousand six hundred fourteen dollars ($11,614). The District estate tax is twenty-one thousand five hundred eighty-six dollars ($21,586).

 

Decedent's Property:		Value
D.C. real property	$600,000
Tangible personal property	135,000
Intangible personal property	185,000
Maryland real property	400,000
Maryland tangible personal property	95,000
Total gross estate		$1,415,000
Total allowable deductions		415,000
Taxable estate		1,000,000
Gross federal estate tax		345,800
Allowable unified credit		192,800
Allowable credit for state death taxes ("federal credit")		33,200
Potential District estate tax		33,200
District estate tax computed by reducing
$33,200 by the lesser of:

 

(1) Eleven thousand six hundred twenty dollars ($11,600) (the amount of death tax paid to Maryland); or

 

(2) Eleven thousand six hundred fourteen dollars ($11,614) determined as follows:

 

Federal credit	X	Value of the gross estate subject to death taxation in Maryland (applying District law)
		The value of the decedent's gross estate
$33,200	X	$495,000
		$1,415,000
District estate tax ($33,200 - $11,614)		$21,586

 

3702.5The District estate tax shall be imposed on the estate of a nonresident decedent to the extent that the decedent's property has a taxable situs in the District. The tax is computed under the following formula:

 

Federal credit	X	Value of that part of decedent's gross estate subject to tax by the District
		The value of the decedent's gross estate

Example: The decedent was domiciled in the State of Maryland and conducted business as a sole proprietor in the District of Columbia. The decedent gross estate totals three million four hundred thirty-five thousand dollars ($3,435,000) and allowable deductions total seven hundred thirty-five thousand dollars ($735,000). Under the statute, the District estate tax is one hundred nineteen thousand eight hundred and twelve dollars ($119,812).

Decedent's Property:				Value
Maryland real property	$545,000
Tangible personal property located in Maryland	135,000
Non-business intangible personal property	105,000
D.C. real property used in business	2,000,000
Commercial bank accounts located in Maryland related to business	500,000
Business tangible personal property located in the District	150,000
Total gross estate				$3,435,000
Total allowable deductions				735,000
Taxable estate				2,700,000
Gross federal estate tax			1,125,800
Allowable unified credit			192,800
Allowable credit for state death taxes ("federal credit")			155,600

 

District estate tax computed under the following formula:

 

Federal credit	×	Value of that part of decedent's gross estate subject to tax by the District
		The value of the decedent's gross estate

 

$ 155,600	×	$ 2,650,000
		$ 3,435,000

 

District estate tax

$ 120,041

 

source

Final Rulemaking published at 35 DCR 2353, 2354 (April 1, 1988).