2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1005 - Computation of Taxable Income (§§ 30101 — 30157) › Subchapter B - Treatment of Certain Income Items (§§ 30111 — 30119) › § 30113 - Income in respect to decedent

(a) Inclusion in gross income. —
(1) General rule. — The amount of all items of gross income in respect of a decedent which are not properly includible in respect of the taxable period in which falls the date of his/her death or a prior period shall be included in the gross income, for the taxable year when received, of:
(A) The estate of the decedent, if the right to receive the amount is acquired by the decedent’s estate from the decedent; or
(B) the person who, by reason of the death of the decedent, acquires the right to receive the amount, if the right to receive the amount is not acquired by the decedent’s estate from the decedent, or
(C) the person who acquires from the decedent the right to receive the amount by bequest, devise, or inheritance, if the amount is received after a distribution by the decedent’s estate of such right.
(2) Income in case of sale or other provisions. — If a right, described in clause (1), to receive an amount is transferred by the estate of the decedent or a person who received such right by reason of the death of the decedent or by bequest, devise, or inheritance from the decedent, there shall be included in the gross income of the estate or such person, as the case may be, for the taxable period in which the transfer occurs, the fair market value of such right at the time of such transfer plus the amount by which any consideration for the transfer exceeds such fair market value. For purposes of this clause, the term “transfer” includes sale, exchange, or other disposition, but does not include transmission at death to the estate of the decedent or a transfer to a person pursuant to the right of such person to receive such amount by reason of the death of the decedent or by bequest, devise, or inheritance from the decedent.
(3) Character of income determined by reference to decedent. — The right, described in clause (1), to receive an amount shall be treated, in the hands of the estate of the decedent or any person who acquired such right by reason of the death of the decedent, or by bequest, devise or inheritance from the decedent, as if it had been acquired by the estate or such person in the transaction in which the decedent acquired such right and the amount includible in gross income under clause (1) or (2) shall be considered in the hands of the estate or such person to have the character which it would have had in the hands of the decedent if he/she had lived and received such amount.
(b) Allowance of deductions and credits. — The amount of any deduction specified in § 30121, § 30122, § 30123, § 30127, and § 30135(a)(2)(A) and (B) of this title relating to deductions for expenses, interest, taxes, and depletion or credit specified in § 30201 of this title in respect of a decedent which is not properly allowable to the decedent in respect of the taxable period in which falls the date of his/her death, or a prior period, shall be allowed:
(1) Expenses, interest, and taxes. — In the case of a deduction specified in § 30121, § 30122, § 30123, and § 30135(a)(2)(A) and (B) of this title a credit specified in § 30201 of this title, in the taxable year when paid:
(A) To the estate of the decedent; except that
(B) if the estate of the decedent is not liable to discharge the obligation to which the deduction or credit relates, to the person who, by reason of the decedent’s death or by bequest, devise, or inheritance acquires, subject to such obligation, from the decedent an interest in property of the decedent.
(2) Depletion. — In the case of the deduction specified in § 30127 of this title, to the person described in paragraph (A), (B), or (C) of subsection (a)(1) who, in the manner described therein, receives the income to which the deduction relates, in the taxable year when such income is received.
(c) Deduction for estate tax. —
(1) Allowance of deduction. —
(A) General rule. — A person who includes an amount in gross income under subsection (a) shall be allowed, for the same taxable year, as a deduction an amount which bears the same ratio to the estate tax attributable to the net value for estate tax purposes of all the items described in subsection (a)(1) as the value for estate tax purposes of the items of gross income or portions thereof in respect of which such person included the amount in gross income (or the amount included in gross income, whichever is lower) bears to the value for estate tax purposes of all the items described in subsection (a)(1).
(2) Method of computing deduction. — For purposes of clause (1):
(A) The term “estate tax” means the tax imposed on the estate of the decedent (reduced by the credits against such tax) imposed by §§ 31001 et seq. of this title.
(B) The net value for estate tax purposes of all the items described in subsection (a)(1) shall be the excess of the value for estate tax purposes of all the items described in subsection (a)(1) over the deductions from the gross estate in respect of claims which represent the deductions and credit described in subsection (b).
(C) The estate tax attributable to such net value shall be an amount equal to the excess of the estate tax over the estate tax computed without including in the gross estate such net value.
History —Jan. 31, 2011, No. 1, § 1032.03, retroactive to Jan. 1, 2011.