Section 3702 - Equitable apportionment of Federal estate tax(a) General rule.--Subject to the provisions of section 3701 (relating to power of decedent), the Federal estate tax shall be apportioned equitably among all parties interested in property includible in the gross estate for Federal estate tax purposes in proportion to the value of the interest of each party, subject to the rules stated in this section.(b) Pre-residuary.--(1) No Federal estate tax shall be apportioned against a beneficiary of any pre-residuary gift made by will. Any Federal estate tax attributable thereto shall be paid entirely from the residue of the estate and charged in the same manner as a general administration expense of the estate, except that when a portion of the residue of the estate is allowable as a deduction for Federal estate tax purposes the tax shall be paid to the extent possible from the portion of the residue which is not so allowable.(2) No Federal estate tax shall be apportioned against a beneficiary of any pre-residuary gift made by inter vivos trust. Any Federal estate tax attributable thereto shall be paid entirely from the residue of the trust and charged in the same manner as a general administration expense of the trust, except that when a portion of the residue of the trust is allowable as a deduction for Federal estate tax purposes the tax shall be paid to the extent possible from the portion of the residue which is not so allowable.(c) Deductions.--No Federal estate tax shall be apportioned against an interest allowable as a Federal estate tax marital or charitable deduction (determined and valued without regard to any Pennsylvania inheritance tax or other state or foreign death taxes apportioned against such interest) except as otherwise provided in subsections (b) and (g).(d) Credits.--Any Federal estate tax credit for state or foreign death taxes on property includable in the gross estate for Federal estate tax purposes shall inure to the benefit of the parties chargeable with the payment of the state or foreign death taxes in proportion to the amount of the taxes paid by each party, but any credit inuring to the benefit of a party shall not exceed the Federal estate tax apportionable to that party. Any unified credit against Federal estate tax, credit for tax on prior transfers (sometimes called the credit for property previously taxed) or credit for gift taxes paid by the decedent or his estate with respect to gifts made by the decedent before January 1, 1977, shall inure to the benefit of all parties liable to apportionment in proportion to the amount of Federal estate tax apportioned against each party under the other provisions of this chapter. Any Federal estate tax credit for gift taxes paid by the donee of a gift made before January 1, 1977, shall inure to the benefit of the donee.(e) Election by spouse.--Property passing to a spouse who elects to take an elective share under Chapter 22 (relating to elective share of surviving spouse) shall be exempt from apportionment of Federal estate tax only to the extent provided in subsection (c).(f) Additional Federal estate tax.--(1) Any increase in Federal estate tax caused by the inclusion under section 2044 of the Internal Revenue Code of 1986 ( Public Law 99-514, 26 U.S.C. § 2044 ) of a qualified terminable interest trust in the estate of a decedent shall be apportioned against that trust.(2) Any increase in Federal estate tax caused by a taxable event occurring in a qualified domestic trust under section 2056A of the Internal Revenue Code of 1986 ( Public Law 99-514, 26 U.S.C. § 2056A ) shall be apportioned against that trust notwithstanding the provisions of subsection (b) or (c).(3) Any additional Federal estate tax due because a qualified heir disposes of qualified real property or ceases to use it for the qualified use shall be apportioned against the qualified heir notwithstanding the provisions of subsection (b).(g) Present and future interests.--When both a present and a future interest are involved, the Federal estate tax apportioned, including interest and penalties, shall be paid entirely from principal, except as otherwise provided in subsection (h), even if the future interest qualifies for a Federal estate tax charitable deduction or the holder of the present interest also has rights in the principal or the principal is otherwise exempt from apportionment.(h) Interest and penalties.--Interest and penalties shall be apportioned in the same manner as the principal amount of the Federal estate tax unless the court finds it inequitable to do so by reason of special circumstances, in which case the court may direct a different apportionment of interest and penalties. To the extent the interest or penalties are apportioned to or are payable out of a residuary estate or a trust, they shall be paid from income or principal in the same manner as the Federal estate tax, subject to a fiduciary's power to adjust under Chapter 81 (relating to principal and income).(i) Values.--The values used in determining the amount of Federal estate tax liability shall be used for Federal estate tax apportionment purposes.(j) Gift tax.--Gift tax paid by the decedent and imposed on a gift by the decedent or his spouse within three years of the date of his death and included in his gross estate shall be treated in the same manner as though the amount of such gift tax had been a preresiduary testamentary gift by the decedent to the donee of the gift. 1982 , Feb. 18, P.L. 45, No. 26, § 4, imd. effective. Amended 1992, Dec. 16, P.L. 1163, No. 152, §9, imd. effective; 2002, May 16, P.L. 330, No. 50, § 4, effective in 60 days; 2006, July 7, P.L. 625, No. 98, § 3, imd. effective.