Qualified Domestic Trust (QDOT) Election

§ 2056A. Qualified domestic trust(a) Qualified domestic trust definedFor purposes of this section and section 2056(d), the term “qualified domestic trust” means, with respect to any decedent, any trust if—(1) the trust instrument—(A) except as provided in regulations prescribed by the Secretary, requires that at least 1 trustee of the trust be an individual citizen of the United States or a domestic corporation, and (B) provides that no distribution (other than a distribution of income) may be made from the trust unless a trustee who is an individual citizen of the United States or a domestic corporation has the right to withhold from such distribution the tax imposed by this section on such distribution, (2) such trust meets such requirements as the Secretary may by regulations prescribe to ensure the collection of any tax imposed by subsection (b), and (3) an election under this section by the executor of the decedent applies to such trust. (b) Tax treatment of trust(1) Imposition of estate taxThere is hereby imposed an estate tax on—(A) any distribution before the date of the death of the surviving spouse from a qualified domestic trust, and (B) the value of the property remaining in a qualified domestic trust on the date of the death of the surviving spouse. (2) Amount of tax(A) In generalIn the case of any taxable event, the amount of the estate tax imposed by paragraph (1) shall be the amount equal to—(i) the tax which would have been imposed under section 2001 on the estate of the decedent if the taxable estate of the decedent had been increased by the sum of—(I) the amount involved in such taxable event, plus (II) the aggregate amount involved in previous taxable events with respect to qualified domestic trusts of such decedent, reduced by (ii) the tax which would have been imposed under section 2001 on the estate of the decedent if the taxable estate of the decedent had been increased by the amount referred to in clause (i)(II). (B) Tentative tax where tax of decedent not finally determined(i) In generalIf the tax imposed on the estate of the decedent under section 2001 is not finally determined before the taxable event, the amount of the tax imposed by paragraph (1) on such event shall be determined by using the highest rate of tax in effect under section 2001 as of the date of the decedent’s death. (ii) Refund of excess when tax finally determinedIf—(I) the amount of the tax determined under clause (i), exceeds (II) the tax determined under subparagraph (A) on the basis of the final determination of the tax imposed by section 2001 on the estate of the decedent,  such excess shall be allowed as a credit or refund (with interest) if claim therefor is filed not later than 1 year after the date of such final determination.