A credit for inheritance tax paid in the estate of a prior decedent is allowed where the present decedent was a Class A transferee (see Revenue and Taxation Code Section 13307) in respect to the prior decedent, and the present transferee is a Class A transferee in respect to the present decedent, if the date of death of the second decedent is not more than five years after the date of death of the first decedent.

The previously taxed property credit is a credit against and deducted from the Class A transferee's tax. The amount of the credit is limited to the proportion of the maximum credit available which the clear market value of the property transferred to a Class A transferee in the present estate bears to the total clear market value of the present decedent's taxable estate. The amount of tax paid by the present decedent in the prior estate is the maximum amount of credit.

If an additional tax under Revenue and Taxation Code Section 13441 or 13442 is due in either the first or second estate, the previously taxed property credit is not allowable.

Note: Reference: Section 14051, Revenue and Taxation Code.