Tracing Rules

Tracing Rules means:
rules used to determine the origin of property held at death for estate tax purposes (before 1977) and to ascertain whether borrowed money is usea iu purchase tax-exempt property. An interest deduction is denied for debt incurred to purchase or carry a tax-exempt security. Thus, the U.S. Internal Revenue Service will trace the flow of funds to their actual use. Former IRC (check if this IRC provision is current here) §265; Former Revenue Procedure (check if this Rev. Proc. U.S. Internal Revenue Service (IRS) statement is current) 74-8, 1974-1 C.B. 419.

See Inheritance Tax and Inheritance Tax.