2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART III - Decedent’s Estate and Gifts (§§ 31001 — 31176) › Chapter 1022 - Decedent’s Estate; Residents of Puerto Rico (§§ 31011 — 31044) › Subchapter D - Credits Against Taxes (§§ 31041 — 31044) › § 31041 - Credits for taxes on prior transfers

(a) General rule. — All or part of the taxes paid pursuant to § 31011 of this title, or the corresponding provisions of preceding laws shall be credited against the taxes imposed by this chapter, or Chapter 1023 of this part, as determined below with respect to transfer of property made to the decedent by a person (hereinafter designated as the transferor) who died or who made the gift within ten (10) years before the death of the decedent. Such credit shall be equal to the following percentages of the taxes previously paid, computed and adjusted pursuant to subsection (b) of this section:
(1) One hundred percent (100%), if the decedent died within the first two (2) years after the date of the prior transfer;
(2) eighty percent (80%), if the decedent died after the first two (2) years, but before the first four (4) years after the date of the prior transfer;
(3) sixty percent (60%), if the decedent died after the first four (4) years, but before the first six (6) years after the date of the prior transfer;
(4) forty percent (40%), if the decedent died after the first six (6) years, but before the first eight (8) years after the date of the prior transfer;
(5) twenty percent (20%), if the decedent died after the first eight (8) years, but before the first ten (10) years after the date of the prior transfer.
(b) Computation of credit for taxes paid under this part. — Subject to the limitation provided in subsection (c), the credit provided by this section in connection with taxes paid under this part or the corresponding provisions in preceding laws, shall be an amount which bears the same ratio to the amount paid with respect to the estate of the transferor as the value of the property transferred bears to the taxable decedent’s estate or the taxable gift, as the case may be, decreased by taxes on inheritances or gifts paid in connection with such estate. Credits shall only be granted in connection with prior transfers where the transferor acquired property from a person who died or made the gift within ten (10) years before the death of the decedent.
(c) Limitation on the credit. —
(1) In general. — The credit provided in this section shall not exceed the amount by which:
(A) The taxes imposed by § 31011 of this title (after deducting the tax credits provided in § 31042 of this title), computed without regard to this section, exceeds
(B) such tax computed by excluding from the decedent’s gross estate the value of such property transferred. For purposes of this section, the value of such property transferred shall be the value set forth in subsection (d).
(2) Two or more transferors. — If the credit provided in this section is granted in connection with property received from two (2) or more transferors, the limitation provided in clause (1) of this subsection shall be computed by aggregating the value of the property so transferred to the decedent. The limitation thus determined shall be apportioned in accordance with the value of the property transferred to the decedent by each transferor.
(d) Valuation of property transferred. — The value of the property transferred to the decedent shall be the value used to determine the taxes on the prior transfer made in benefit of the transferor, minus:
(1) Any taxes on inheritances or gifts applicable to the property transferred in the net value of such property for the decedent.
(2) Any encumbrance or any obligation imposed by the transferor to the decedent in connection with such property.
(e) Definition. — For purposes of this section:
(1) The term “property” includes any beneficial interest of a person in a property.
(2) the term “previously paid taxes” includes taxes on gifts as well as taxes on decedent’s estates or inheritances, and
(3) the term “prior transfer” includes a transfer by gift, as well as a transfer by inheritance.
History —Jan. 31, 2011, No. 1, § 2024.01, retroactive to Jan. 1, 2011.