-CITE-
26 USC CHAPTER 11 - ESTATE TAX 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
-HEAD-
CHAPTER 11 - ESTATE TAX
-MISC1-
Subchapter Sec.(!1)
A. Estates of citizens or residents 2001
B. Estates of nonresidents not citizens 2101
C. Miscellaneous 2201
-SECREF-
CHAPTER REFERRED TO IN OTHER SECTIONS
This chapter is referred to in sections 529, 646, 664, 667, 1014,
1040, 2519, 2612, 2624, 2642, 2651, 2652, 2661, 2663, 2701, 6103,
6161, 6163, 6212, 6314, 6324, 6324A, 6501, 6601, 6662, 6871, 6901,
6905, 7269, 7404, 7463, 7481, 7517, 7851, 7872 of this title.
-FOOTNOTE-
(!1) Section numbers editorially supplied.
-End-
-CITE-
26 USC Subchapter A - Estates of Citizens or Residents 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
-HEAD-
SUBCHAPTER A - ESTATES OF CITIZENS OR RESIDENTS
-MISC1-
Part
I. Tax imposed.
II. Credits against tax.
III. Gross estate.
IV. Taxable estate.
-End-
-CITE-
26 USC PART I - TAX IMPOSED 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART I - TAX IMPOSED
-HEAD-
PART I - TAX IMPOSED
-MISC1-
Sec.
2001. Imposition and rate of tax.
2002. Liability for payment.
AMENDMENTS
1976 - Pub. L. 94-455, title XX, Sec. 2001(c)(1)(N)(i), Oct. 4,
1976, 90 Stat. 1853, substituted "Imposition and rate of tax" for
"Rate of tax" in item 2001.
-End-
-CITE-
26 USC Sec. 2001 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART I - TAX IMPOSED
-HEAD-
Sec. 2001. Imposition and rate of tax
-STATUTE-
(a) Imposition
A tax is hereby imposed on the transfer of the taxable estate of
every decedent who is a citizen or resident of the United States.
(b) Computation of tax
The tax imposed by this section shall be the amount equal to the
excess (if any) of -
(1) a tentative tax computed under subsection (c) on the sum of
-
(A) the amount of the taxable estate, and
(B) the amount of the adjusted taxable gifts, over
(2) the aggregate amount of tax which would have been payable
under chapter 12 with respect to gifts made by the decedent after
December 31, 1976, if the provisions of subsection (c) (as in
effect at the decedent's death) had been applicable at the time
of such gifts.
For purposes of paragraph (1)(B), the term "adjusted taxable gifts"
means the total amount of the taxable gifts (within the meaning of
section 2503) made by the decedent after December 31, 1976, other
than gifts which are includible in the gross estate of the
decedent.
(c) Rate schedule
(1) In general
If the amount with The tentative tax is:
respect to which the
tentative tax to be
computed is:
--------------------------------------------------------------------
Not over $10,000 18 percent of such amount.
Over $10,000 but not over $1,800, plus 20 percent of the
$20,000 excess of such amount over $10,000.
Over $20,000 but not over $3,800, plus 22 percent of the
$40,000 excess of such amount over $20,000.
Over $40,000 but not over $8,200 plus 24 percent of the
$60,000 excess of such amount over $40,000.
Over $60,000 but not over $13,000, plus 26 percent of the
$80,000 excess of such amount over $60,000.
Over $80,000 but not over $18,200, plus 28 percent of the
$100,000 excess of such amount over $80,000.
Over $100,000 but not over $23,800, plus 30 percent of the
$150,000 excess of such amount over $100,000.
Over $150,000 but not over $38,800, plus 32 percent of the
$250,000 excess of such amount over $150,000.
Over $250,000 but not over $70,800, plus 34 percent of the
$500,000 excess of such amount over $250,000.
Over $500,000 but not over $155,800, plus 37 percent of the
$750,000 excess of such amount over $500,000.
Over $750,000 but not over $248,300, plus 39 percent of the
$1,000,000 excess of such amount over $750,000.
Over $1,000,000 but not $345,800, plus 41 percent of the
over $1,250,000 excess of such amount over
$1,000,000.
Over $1,250,000 but not $448,300, plus 43 percent of the
over $1,500,000 excess of such amount over
$1,250,000.
Over $1,500,000 but not $555,800, plus 45 percent of the
over $2,000,000 excess of such amount over
$1,500,000.
Over $2,000,000 but not $780,800, plus 49 percent of the
over $2,500,000 excess of such amount over
$2,000,000.
Over $2,500,000 $1,025,800, plus 50% of the excess
over $2,500,000.
--------------------------------------------------------------------
(2) Phasedown of maximum rate of tax
(A) In general
In the case of estates of decedents dying, and gifts made, in
calendar years after 2002 and before 2010, the tentative tax
under this subsection shall be determined by using a table
prescribed by the Secretary (in lieu of using the table
contained in paragraph (1)) which is the same as such table;
except that -
(i) the maximum rate of tax for any calendar year shall be
determined in the table under subparagraph (B), and
(ii) the brackets and the amounts setting forth the tax
shall be adjusted to the extent necessary to reflect the
adjustments under subparagraph (A).
(B) Maximum rate
The maximum
In calendar year: rate is:
2003 49 percent
2004 48 percent
2005 47 percent
2006 46 percent
2007, 2008, and 2009 45 percent.
(d) Adjustment for gift tax paid by spouse
For purposes of subsection (b)(2), if -
(1) the decedent was the donor of any gift one-half of which
was considered under section 2513 as made by the decedent's
spouse, and
(2) the amount of such gift is includible in the gross estate
of the decedent,
any tax payable by the spouse under chapter 12 on such gift (as
determined under section 2012(d)) shall be treated as a tax payable
with respect to a gift made by the decedent.
(e) Coordination of sections 2513 and 2035
If -
(1) the decedent's spouse was the donor of any gift one-half of
which was considered under section 2513 as made by the decedent,
and
(2) the amount of such gift is includible in the gross estate
of the decedent's spouse by reason of section 2035,
such gift shall not be included in the adjusted taxable gifts of
the decedent for purposes of subsection (b)(1)(B), and the
aggregate amount determined under subsection (b)(2) shall be
reduced by the amount (if any) determined under subsection (d)
which was treated as a tax payable by the decedent's spouse with
respect to such gift.
(f) Valuation of gifts
(1) In general
If the time has expired under section 6501 within which a tax
may be assessed under chapter 12 (or under corresponding
provisions of prior laws) on -
(A) the transfer of property by gift made during a preceding
calendar period (as defined in section 2502(b)); or
(B) an increase in taxable gifts required under section
2701(d),
the value thereof shall, for purposes of computing the tax under
this chapter, be the value as finally determined for purposes of
chapter 12.
(2) Final determination
For purposes of paragraph (1), a value shall be treated as
finally determined for purposes of chapter 12 if -
(A) the value is shown on a return under such chapter and
such value is not contested by the Secretary before the
expiration of the time referred to in paragraph (1) with
respect to such return;
(B) in a case not described in subparagraph (A), the value is
specified by the Secretary and such value is not timely
contested by the taxpayer; or
(C) the value is determined by a court or pursuant to a
settlement agreement with the Secretary.
For purposes of subparagraph (A), the value of an item shall be
treated as shown on a return if the item is disclosed in the
return, or in a statement attached to the return, in a manner
adequate to apprise the Secretary of the nature of such item.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 373; Pub. L. 94-455, title XX,
Sec. 2001(a)(1), Oct. 4, 1976, 90 Stat. 1846; Pub. L. 95-600, title
VII, Sec. 702(h)(1), Nov. 6, 1978, 92 Stat. 2930; Pub. L. 97-34,
title IV, Sec. 402(a)-(c), Aug. 13, 1981, 95 Stat. 300; Pub. L.
98-369, div. A, title I, Sec. 21(a), July 18, 1984, 98 Stat. 506;
Pub. L. 100-203, title X, Sec. 10401(a)-(b)(2)(A), Dec. 22, 1987,
101 Stat. 1330-430, 1330-431; Pub. L. 103-66, title XIII, Sec.
13208(a)-(b)(2), Aug. 10, 1993, 107 Stat. 469; Pub. L. 105-34,
title V, Secs. 501(a)(1)(D), 506(a), Aug. 5, 1997, 111 Stat. 845,
855; Pub. L. 105-206, title VI, Sec. 6007(e)(2)(B), July 22, 1998,
112 Stat. 810; Pub. L. 105-277, div. J, title IV, Sec. 4003(c),
Oct. 21, 1998, 112 Stat. 2681-909; Pub. L. 107-16, title V, Sec.
511(a)-(c), June 7, 2001, 115 Stat. 70.)
-STATAMEND-
AMENDMENT OF SECTION
For termination of amendment by section 901 of Pub. L. 107-16,
see Effective and Termination Dates of 2001 Amendment note below.
-MISC1-
AMENDMENTS
2001 - Subsec. (c)(1). Pub. L. 107-16, Secs. 511(a), 901,
temporarily substituted in table provisions that if the amount on
which the tax is computed is over $2,500,000, then the tentative
tax is $1,025,800, plus 50% of the excess over $2,500,000 for
provisions that if the amount on which the tax is computed is over
$2,500,000 but not over $3,000,000, then the tentative tax is
$1,025,800, plus 53% of the excess over $2,500,000, and if the
amount on which the tax is computed is over $3,000,000, then the
tentative tax is $1,290,800, plus 55% of the excess over
$3,000,000. See Effective and Termination Dates of 2001 Amendment
note below.
Subsec. (c)(2). Pub. L. 107-16, Secs. 511(c), 901, temporarily
added par. (2). See Effective and Termination Dates of 2001
Amendment note below.
Pub. L. 107-16, Secs. 511(b), 901, temporarily struck out heading
and text of par. (2). Text read as follows: "The tentative tax
determined under paragraph (1) shall be increased by an amount
equal to 5 percent of so much of the amount (with respect to which
the tentative tax is to be computed) as exceeds $10,000,000 but
does not exceed the amount at which the average tax rate under this
section is 55 percent." See Effective and Termination Dates of 2001
Amendment note below.
1998 - Subsec. (f). Pub. L. 105-206, Sec. 6007(e)(2)(B),
reenacted heading without change and amended text generally. Prior
to amendment, text read as follows: "If -
"(1) the time has expired within which a tax may be assessed
under chapter 12 (or under corresponding provisions of prior
laws) on the transfer of property by gift made during a preceding
calendar period (as defined in section 2502(b)), and
"(2) the value of such gift is shown on the return for such
preceding calendar period or is disclosed in such return, or in a
statement attached to the return, in a manner adequate to apprise
the Secretary of the nature of such gift,
the value of such gift shall, for purposes of computing the tax
under this chapter, be the value of such gift as finally determined
for purposes of chapter 12."
Subsec. (f)(2). Pub. L. 105-277 inserted concluding provisions.
1997 - Subsec. (c)(2). Pub. L. 105-34, Sec. 501(a)(1)(D),
substituted "the amount at which the average tax rate under this
section is 55 percent" for "$21,040,000".
Subsec. (f). Pub. L. 105-34, Sec. 506(a), added subsec. (f).
1993 - Subsec. (c)(1). Pub. L. 103-66, Sec. 13208(a), substituted
in table provisions that if the amount on which the tax is computed
is over $2,500,000 but not over $3,000,000, then the tentative tax
is $1,025,800, plus 53% of the excess over $2,500,000 and if the
amount on which the tax is computed is over $3,000,000, then the
tentative tax is $1,290,800, plus 55% of the excess over $3,000,000
for provisions that if the amount on which the tax is computed is
over $2,500,000, then the tentative tax is $1,025,800, plus 50% of
the excess over $2,500,000.
Subsec. (c)(2), (3). Pub. L. 103-66, Sec. 13208(b)(1), (2),
redesignated par. (3) as (2), struck out "($18,340,000 in the case
of decedents dying, and gifts made, after 1992)" after "exceed
$21,040,000", and struck out former par. (2) which related to the
rates of tax on estates under this section for the years 1982 to
1992.
1987 - Subsec. (b)(1). Pub. L. 100-203, Sec. 10401(b)(2)(A)(i),
substituted "under subsection (c)" for "in accordance with the rate
schedule set forth in subsection (c)".
Subsec. (b)(2). Pub. L. 100-203, Sec. 10401(b)(2)(A)(ii),
substituted "the provisions of subsec. (c)" for "the rate schedule
set forth in subsection (c)".
Subsec. (c)(2)(A). Pub. L. 100-203, Sec. 10401(a)(1), substituted
"1993" for "1988".
Subsec. (c)(2)(D). Pub. L. 100-203, Sec. 10401(a)(2), (3),
substituted in heading "After 1983 and before 1993" for "For 1984,
1985, 1986, or 1987", and in text "after 1983 and before 1993" for
"in 1984, 1985, 1986, or 1987".
Subsec. (c)(3). Pub. L. 100-203, Sec. 10401(b)(1), added par.
(3).
1984 - Subsec. (c)(2)(A), (D). Pub. L. 98-369 substituted "1988"
for "1985" in subpar. (A) and substituted "1984, 1985, 1986, or
1987" for "1984" in heading and text of subpar. (D).
1981 - Subsec. (b)(2). Pub. L. 97-34, Sec. 402(c), inserted
"which would have been" before "payable" and ", if the rate
schedule set forth in subsection (c) (as in effect at the
decedent's death) had been applicable at the time of such gifts"
after "December 31, 1976,".
Subsec. (c). Pub. L. 97-34, Sec. 402(a), (b)(1), designated
existing provision as par. (1), inserted heading "In general" and
substituted in table provision that if the amount computed is over
$2,500,000 then the tentative tax is $1,025,800 plus 50% of the
excess over $2,500,000 for provisions that if the amount computed
is over $2,500,000 but not over $3,000,000, then the tentative tax
is $1,025,800 plus 53% of the excess over $2,500,000, over
$3,000,000 but not over $3,500,000 then the tentative tax is
$1,290,000 plus 57% of the excess over $3,000,000, over $3,500,000
but not over $4,000,000 then the tentative tax is $1,575,800 plus
61% of the excess over $3,500,000, over $4,000,000 but not over
$4,500,000 then the tentative tax is $1,880,800 plus 65% of the
excess over $4,000,000, over $4,500,000 but not over $5,000,000
then the tentative tax is $2,205,800 plus 69% of the excess over
$4,500,000, over $5,000,000 then the tentative tax is $2,550,800
plus 70% of the excess over $5,000,000, and added par. (2).
1978 - Subsec. (e). Pub. L. 95-600 added subsec. (e).
1976 - Pub. L. 94-455 substituted provisions setting a unified
rate schedule for estate and gift taxes ranging from 18 percent for
the first $10,000 in taxable transfers to 70 percent of taxable
transfers in excess of $5,000,000, with provision for adjustments
for gift taxes paid by spouses, for provisions setting an estate
tax of 3 percent of the first $5,000 of the taxable estate to 77
percent of the taxable estate in excess of $10,000,000.
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Pub. L. 107-16, title V, Sec. 511(f)(1), (2), June 7, 2001, 115
Stat. 71, provided that:
"(1) Subsections (a) and (b). - The amendments made by
subsections (a) and (b) [amending this section] shall apply to
estates of decedents dying, and gifts made, after December 31,
2001.
"(2) Subsection (c). - The amendment made by subsection (c)
[amending this section] shall apply to estates of decedents dying,
and gifts made, after December 31, 2002."
Amendment by Pub. L. 107-16 inapplicable to estates of decedents
dying, gifts made, or generation skipping transfers, after Dec. 31,
2010, and the Internal Revenue Code of 1986 to be applied and
administered to such estates, gifts, and transfers as if such
amendment had never been enacted, see section 901 of Pub. L.
107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1998 AMENDMENTS
Amendment by Pub. L. 105-277 effective as if included in the
provision of the Taxpayer Relief Act of 1997, Pub. L. 105-34, to
which such amendment relates, see section 4003(l) of Pub. L.
105-277, set out as a note under section 86 of this title.
Amendment by Pub. L. 105-206 effective, except as otherwise
provided, as if included in the provisions of the Taxpayer Relief
Act of 1997, Pub. L. 105-34, to which such amendment relates, see
section 6024 of Pub. L. 105-206, set out as a note under section 1
of this title.
EFFECTIVE DATE OF 1997 AMENDMENT
Section 501(f) of Pub. L. 105-34, as amended by Pub. L. 105-206,
title VI, Sec. 6007(a)(2), July 22, 1998, 112 Stat. 807, provided
that: "The amendments made by this section [amending this section
and sections 2010, 2032A, 2102, 2503, 2505, 2631, 6018, and 6601 of
this title] (other than the amendment made by subsection (d)
[amending section 2631 of this title]) shall apply to the estates
of decedents dying, and gifts made, after December 31, 1997."
Section 506(e)(1) of Pub. L. 105-34, as amended by Pub. L.
105-206, title VI, Sec. 6007(e)(1), July 22, 1998, 112 Stat. 809,
provided that: "The amendments made by subsections (a), (c), and
(d) [enacting section 7477 of this title and amending this section
and section 2504 of this title] shall apply to gifts made after the
date of the enactment of this Act [Aug. 5, 1997]."
EFFECTIVE DATE OF 1993 AMENDMENT
Section 13208(c) of Pub. L. 103-66 provided that: "The amendments
made by this section [amending this section and section 2101 of
this title] shall apply in the case of decedents dying and gifts
made after December 31, 1992."
EFFECTIVE DATE OF 1987 AMENDMENT
Section 10401(c) of Pub. L. 100-203 provided that: "The
amendments made by this section [amending this section and section
2502 of this title] shall apply in the case of decedents dying, and
gifts made, after December 31, 1987."
EFFECTIVE DATE OF 1984 AMENDMENT
Section 21(b) of Pub. L. 98-369 provided that: "The amendments
made by subsection (a) [amending this section] shall apply to the
estates of decedents dying after, and gifts made after, December
31, 1983."
EFFECTIVE DATE OF 1981 AMENDMENT
Section 402(d) of Pub. L. 97-34 provided that: "The amendments
made by this section [amending this section] shall apply to estates
of decedents dying after, and gifts made after, December 31, 1981."
EFFECTIVE DATE OF 1978 AMENDMENT
Section 702(h)(3) of Pub. L. 95-600 provided that: "The
amendments made by this subsection [amending this section and
section 2602 of this title] shall apply with respect to the estates
of decedents dying after December 31, 1976, except that such
amendments shall not apply to transfers made before January 1,
1977."
EFFECTIVE DATE OF 1976 AMENDMENT
Section 2001(d)(1) of Pub. L. 94-455 provided that: "The
amendments made by subsections (a) [enacting section 2010, amending
this section and sections 2012 and 2035, and repealing section 2052
of this title] and (c)(1) [amending sections 2011, 2012, 2013,
2014, 2038, 2044, 2101, 2102, 2104, 2106, 2107, 2206, 2207, and
6018 of this title] shall apply to the estates of decedents dying
after December 31, 1976; except that the amendments made by
subsection (a)(5) [amending section 2035 of this title] and
subparagraphs (K) and (L) of subsection (c)(1) [amending sections
2038 and 2104 of this title] shall not apply to transfers made
before January 1, 1977."
SHORT TITLE
Pub. L. 91-614, Sec. 1(a), Dec. 31, 1970, 84 Stat. 1836, provided
that: "This Act [enacting section 6905 of this title, section 1232a
of Title 15, Commerce and Trade, and section 1033 of former Title
31, Money and Finance, amending sections 56, 1015, 1223, 2012,
2032, 2055, 2204, 2501, 2502, 2503, 2504, 2512, 2513, 2515, 2521,
2522, 2523, 4061, 4063, 4216, 4251, 4491, 6019, 6040, 6075, 6091,
6161, 6212, 6214, 6324, 6412, 6416, 6501, 6504, and 6512 of this
title, and enacting provisions set out as notes under sections 56,
2032, 2204, 2501, 4063, 4216, 4251, 4491, and 6905 of this title]
may be cited as the 'Excise, Estate, and Gift Tax Adjustment Act of
1970'."
CLARIFICATION OF TREATMENT OF CERTAIN EXEMPTIONS FOR PURPOSES OF
FEDERAL ESTATE AND GIFT TAXES
Section 641 of Pub. L. 98-369, as amended by Pub. L. 99-514, Sec.
2, Oct. 22, 1986, 100 Stat. 2095, provided that:
"(a) General Rule. - Nothing in any provision of law exempting
any property (or interest therein) from taxation shall exempt the
transfer of such property (or interest therein) from Federal
estate, gift, and generation-skipping transfer taxes. In the case
of any provision of law enacted after the date of the enactment of
this Act [July 18, 1984], such provision shall not be treated as
exempting the transfer of property from Federal estate, gift, and
generation-skipping transfer taxes unless it refers to the
appropriate provisions of the Internal Revenue Code of 1986
[formerly I.R.C. 1954].
"(b) Effective Date. -
"(1) In general. - The provisions of subsection (a) shall apply
to the estates of decedents dying, gifts made, and transfers made
on or after June 19, 1984.
"(2) Treatment of certain transfers treated as taxable. - The
provisions of subsection (a) shall also apply in the case of any
transfer of property (or interest therein) if at any time there
was filed an estate or gift tax return showing such transfer as
subject to Federal estate or gift tax.
"(3) No inference. - No inference shall arise from paragraphs
(1) and (2) that any transfer of property (or interest therein)
before June 19, 1984, is exempt from Federal estate and gift
taxes."
REPORTS WITH TRANSFERS OF PUBLIC HOUSING BONDS
Section 642 of Pub. L. 98-369 provided that:
"(a) General Rule. - With respect to transfers of public housing
bonds occurring after December 31, 1983, and before June 19, 1984,
the taxpayer shall report the date and amount of such transfer and
such other information as the Secretary of the Treasury or his
delegate shall prescribe by regulations to allow the determination
of the tax and interest due if it is ultimately determined that
such transfers are subject to estate, gift, or generation-skipping
tax.
"(b) Penalty for Failure to Report. - Any taxpayer failing to
provide the information required by subsection (a) shall be liable
for a penalty equal to 25 percent of the excess of (1) the estate,
gift, or generation-skipping tax that is payable assuming that such
transfers are subject to tax, over (2) the tax payable assuming
such transfers are not so subject."
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 163, 691, 1016, 2010,
2011, 2012, 2013, 2014, 2015, 2031, 2032A, 2051, 2053, 2054, 2055,
2056, 2056A, 2057, 2058, 2101, 2107, 2201, 2502, 2504, 2641, 2642,
2661, 6018, 6019, 6166, 6601, 7422, 7481 of this title.
-End-
-CITE-
26 USC Sec. 2002 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART I - TAX IMPOSED
-HEAD-
Sec. 2002. Liability for payment
-STATUTE-
The tax imposed by this chapter shall be paid by the executor.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 374; Pub. L. 98-369, div. A,
title V, Sec. 544(b)(1), July 18, 1984, 98 Stat. 894; Pub. L.
101-239, title VII, Sec. 7304(b)(2)(A), Dec. 19, 1989, 103 Stat.
2353.)
-MISC1-
AMENDMENTS
1989 - Pub. L. 101-239 substituted "The" for "Except as provided
in section 2210, the".
1984 - Pub. L. 98-369 inserted exception phrase.
EFFECTIVE DATE OF 1989 AMENDMENT
Section 7304(b)(3) of Pub. L. 101-239 provided that: "The
amendments made by this subsection [amending this section and
section 6018 of this title and repealing section 2210 of this
title] shall apply to estates of decedents dying after July 12,
1989."
EFFECTIVE DATE OF 1984 AMENDMENT
Section 544(d) of Pub. L. 98-369 provided that: "The amendments
made by this section [enacting section 2210 of this title and
amending this section and sections 6018 and 6166 of this title]
shall apply to those estates of decedents which are required to
file returns on a date (including any extensions) after the date of
enactment of this Act [July 18, 1984]."
-End-
-CITE-
26 USC PART II - CREDITS AGAINST TAX 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART II - CREDITS AGAINST TAX
-HEAD-
PART II - CREDITS AGAINST TAX
-MISC1-
Sec.
2010. Unified credit against estate tax.
2011. Credit for State death taxes.
2012. Credit for gift tax.
2013. Credit for tax on prior transfers.
2014. Credit for foreign death taxes.
2015. Credit for death taxes on remainders.
2016. Recovery of taxes claimed as credit.
AMENDMENTS
1976 - Pub. L. 94-455, title XX, Sec. 2001(c)(1)(N)(ii), Oct. 4,
1976, 90 Stat. 1853, added item 2010.
-End-
-CITE-
26 USC Sec. 2010 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART II - CREDITS AGAINST TAX
-HEAD-
Sec. 2010. Unified credit against estate tax
-STATUTE-
(a) General rule
A credit of the applicable credit amount shall be allowed to the
estate of every decedent against the tax imposed by section 2001.
(b) Adjustment to credit for certain gifts made before 1977
The amount of the credit allowable under subsection (a) shall be
reduced by an amount equal to 20 percent of the aggregate amount
allowed as a specific exemption under section 2521 (as in effect
before its repeal by the Tax Reform Act of 1976) with respect to
gifts made by the decedent after September 8, 1976.
(c) Applicable credit amount
For purposes of this section, the applicable credit amount is the
amount of the tentative tax which would be determined under the
rate schedule set forth in section 2001(c) if the amount with
respect to which such tentative tax is to be computed were the
applicable exclusion amount determined in accordance with the
following table:
In the case of estates of decedents The applicable
dying during: exclusion amount
is:
2002 and 2003 $1,000,000
2004 and 2005 $1,500,000
2006, 2007, and 2008 $2,000,000
2009 $3,500,000.
(d) Limitation based on amount of tax
The amount of the credit allowed by subsection (a) shall not
exceed the amount of the tax imposed by section 2001.
-SOURCE-
(Added Pub. L. 94-455, title XX, Sec. 2001(a)(2), Oct. 4, 1976, 90
Stat. 1848; amended Pub. L. 97-34, title IV, Sec. 401(a)(1),
(2)(A), Aug. 13, 1981, 95 Stat. 299; Pub. L. 101-508, title XI,
Sec. 11801(a)(39), (c)(19)(A), Nov. 5, 1990, 104 Stat. 1388-521,
1388-528; Pub. L. 105-34, title V, Sec. 501(a)(1)(A), (B), Aug. 5,
1997, 111 Stat. 845; Pub. L. 107-16, title V, Sec. 521(a), June 7,
2001, 115 Stat. 71.)
-STATAMEND-
AMENDMENT OF SECTION
For termination of amendment by section 901 of Pub. L. 107-16,
see Effective and Termination Dates of 2001 Amendment note below.
-REFTEXT-
REFERENCES IN TEXT
The Tax Reform Act of 1976, referred to in subsec. (b), is Pub.
L. 94-455, Oct. 4, 1976, 90 Stat. 1520, as amended. For complete
classification of this Act to the Code, see Tables.
Section 2521 of this title, referred to in subsec. (b), was
repealed by section 2001(b)(3) of Pub. L. 94-455, applicable to
gifts made after Dec. 31, 1976.
-MISC1-
AMENDMENTS
2001 - Subsec. (c). Pub. L. 107-16, Secs. 521(a), 901, in table,
temporarily substituted provision that in the case of estates of
decedents dying during the years 2002 and 2003, the years 2004 and
2005, the years 2006, 2007, and 2008, and the year 2009, the
applicable exclusion amount is $1,000,000, $1,500,000, $2,000,000,
and $3,500,000, respectively, for provision that in the case of
decedents dying, and gifts made, during the year 1998, the year
1999, the years 2000 and 2001, the years 2002 and 2003, the year
2004, the year 2005, and the year 2006 or thereafter, the
applicable exclusion amount is $625,000, $650,000, $675,000,
$700,000, $850,000, $950,000, and $1,000,000, respectively. See
Effective and Termination Dates of 2001 Amendment note below.
1997 - Subsec. (a). Pub. L. 105-34, Sec. 501(a)(1)(A),
substituted "the applicable credit amount" for "$192,800".
Subsecs. (c), (d). Pub. L. 105-34, Sec. 501(a)(1)(B), added
subsec. (c) and redesignated former subsec. (c) as (d).
1990 - Subsecs. (b) to (d). Pub. L. 101-508 redesignated subsecs.
(c) and (d) as (b) and (c), respectively, and struck out former
subsec. (b) which provided for a phase-in of the unified credit
against estate tax.
1981 - Subsec. (a). Pub. L. 97-34, Sec. 401(a)(1), substituted
"$192,800" for "$47,000".
Subsec. (b). Pub. L. 97-34, Sec. 401(a)(2)(A), struck out
"$47,000" before "credit" from heading and in text substituted in
subsec. (a) substitutions for "$192,800" amounts of "$62,800",
"$79,300", "$96,300", "$121,800", and "$155,800" in the case of
decedents dying in 1982, 1983, 1984, 1985, and 1986, respectively,
for subsec. (a) substitutions for "$47,000" amounts of "$30,000",
"$34,000", "$38,000", and "$42,500" in the case of decedents dying
in 1977, 1978, 1979, and 1980, respectively.
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Pub. L. 107-16, title V, Sec. 521(e), June 7, 2001, 115 Stat. 72,
provided that:
"(1) In general. - Except as provided in paragraphs (2) and (3),
the amendments made by this section [amending this section and
sections 2057, 2505, and 2631 of this title] shall apply to estates
of decedents dying, and gifts made, after December 31, 2001.
"(2) Subsection (b)(2). - The amendments made by subsection
(b)(2) [amending section 2505 of this title] shall apply to gifts
made after December 31, 2009.
"(3) Subsections (c) and (d). - The amendments made by
subsections (c) and (d) [amending sections 2057 and 2631 of this
title] shall apply to estates of decedents dying, and
generation-skipping transfers, after December 31, 2003."
Amendment by Pub. L. 107-16 inapplicable to estates of decedents
dying, gifts made, or generation skipping transfers, after Dec. 31,
2010, and the Internal Revenue Code of 1986 to be applied and
administered to such estates, gifts, and transfers as if such
amendment had never been enacted, see section 901 of Pub. L.
107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by Pub. L. 105-34 applicable to estates of decedents
dying, and gifts made, after Dec. 31, 1997, see section 501(f) of
Pub. L. 105-34, set out as a note under section 2001 of this title.
EFFECTIVE DATE OF 1981 AMENDMENT
Section 401(c)(1) of Pub. L. 97-34 provided that: "The amendments
made by subsection (a) [amending this section and section 6018 of
this title] shall apply to the estates of decedents dying after
December 31, 1981".
SAVINGS PROVISION
For provisions that nothing in amendment by Pub. L. 101-508 be
construed to affect treatment of certain transactions occurring,
property acquired, or items of income, loss, deduction, or credit
taken into account prior to Nov. 5, 1990, for purposes of
determining liability for tax for periods ending after Nov. 5,
1990, see section 11821(b) of Pub. L. 101-508, set out as a note
under section 29 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2011, 2012, 2013, 2014,
2056A, 2057, 2102, 2107, 2201, 2505, 2631, 6018, 6601 of this
title.
-End-
-CITE-
26 USC Sec. 2011 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART II - CREDITS AGAINST TAX
-HEAD-
Sec. 2011. Credit for State death taxes
-STATUTE-
(a) In general
The tax imposed by section 2001 shall be credited with the amount
of any estate, inheritance, legacy, or succession taxes actually
paid to any State or the District of Columbia, in respect of any
property included in the gross estate (not including any such taxes
paid with respect to the estate of a person other than the
decedent).
(b) Amount of credit
(1) In general
Except as provided in paragraph (2), the credit allowed by this
section shall not exceed the appropriate amount stated in the
following table:
If the adjusted taxable The maximum tax credit
estate is: shall be:
--------------------------------------------------------------------
Not over $90,000 8/10 ths of 1% of the amount by
which the adjusted taxable estate
exceeds $40,000.
Over $90,000 but not over $400 plus 1.6% of the excess over
$140,000 $90,000.
Over $140,000 but not over $1,200 plus 2.4% of the excess over
$240,000 $140,000.
Over $240,000 but not over $3,600 plus 3.2% of the excess over
$440,000 $240,000.
Over $440,000 but not over $10,000 plus 4% of the excess over
$640,000 $440,000.
Over $640,000 but not over $18,000 plus 4.8% of the excess
$840,000 over $640,000.
Over $840,000 but not over $27,600 plus 5.6% of the excess
$1,040,000 over $840,000.
Over $1,040,000 but not $38,800 plus 6.4% of the excess
over $1,540,000 over $1,040,000.
Over $1,540,000 but not $70,800 plus 7.2% of the excess
over $2,040,000 over $1,540,000.
Over $2,040,000 but not $106,800 plus 8% of the excess over
over $2,540,000 $2,040,000.
Over $2,540,000 but not $146,800 plus 8.8% of the excess
over $3,040,000 over $2,540,000
Over $3,040,000 but not $190,800 plus 9.6% of the excess
over $3,540,000 over $3,040,000.
Over $3,540,000 but not $238,800 plus 10.4% of the excess
over $4,040,000 over $3,540,000.
Over $4,040,000 but not $290,800 plus 11.2% of the excess
over $5,040,000 over $4,040,000.
Over $5,040,000 but not $402,800 plus 12% of the excess
over $6,040,000 over $5,040,000.
Over $6,040,000 but not $522,800 plus 12.8% of the excess
over $7,040,000 over $6,040,000.
Over $7,040,000 but not $650,800 plus 13.6% of the excess
over $8,040,000 over $7,040,000.
Over $8,040,000 but not $786,800 plus 14.4% of the excess
over $9,040,000 over $8,040,000.
Over $9,040,000 but not $930,800 plus 15.2% of the excess
over $10,040,000 over $9,040,000.
Over $10,040,000 $1,082,800 plus 16% of the excess
over $10,040,000.
--------------------------------------------------------------------
(2) Reduction of maximum credit
(A) In general
In the case of estates of decedents dying after December 31,
2001, the credit allowed by this section shall not exceed the
applicable percentage of the credit otherwise determined under
paragraph (1).
(B) Applicable percentage
In the case of estates of decedents The applicable
dying during: percentage is:
2002 75 percent
2003 50 percent
2004 25 percent.
(3) Adjusted taxable estate
For purposes of this section, the term "adjusted taxable
estate" means the taxable estate reduced by $60,000.
(c) Period of limitations on credit
The credit allowed by this section shall include only such taxes
as were actually paid and credit therefor claimed within 4 years
after the filing of the return required by section 6018, except
that -
(1) If a petition for redetermination of a deficiency has been
filed with the Tax Court within the time prescribed in section
6213(a), then within such 4-year period or before the expiration
of 60 days after the decision of the Tax Court becomes final.
(2) If, under section 6161 or 6166, an extension of time has
been granted for payment of the tax shown on the return, or of a
deficiency, then within such 4-year period or before the date of
the expiration of the period of the extension.
(3) If a claim for refund or credit of an overpayment of tax
imposed by this chapter has been filed within the time prescribed
in section 6511, then within such 4-year period or before the
expiration of 60 days from the date of mailing by certified mail
or registered mail by the Secretary to the taxpayer of a notice
of the disallowance of any part of such claim, or before the
expiration of 60 days after a decision by any court of competent
jurisdiction becomes final with respect to a timely suit
instituted upon such claim, whichever is later.
Refund based on the credit may (despite the provisions of sections
6511 and 6512) be made if claim therefor is filed within the period
above provided. Any such refund shall be made without interest.
(d) Limitation in cases involving deduction under section 2053(d)
In any case where a deduction is allowed under section 2053(d)
for an estate, succession, legacy, or inheritance tax imposed by a
State or the District of Columbia upon a transfer for public,
charitable, or religious uses described in section 2055 or
2106(a)(2), the allowance of the credit under this section shall be
subject to the following conditions and limitations:
(1) The taxes described in subsection (a) shall not include any
estate, succession, legacy, or inheritance tax for which such
deduction is allowed under section 2053(d).
(2) The credit shall not exceed the lesser of -
(A) the amount stated in subsection (b) on an adjusted
taxable estate determined by allowing such deduction authorized
by section 2053(d), or
(B) that proportion of the amount stated in subsection (b) on
an adjusted taxable estate determined without regard to such
deduction authorized by section 2053(d) as (i) the amount of
the taxes described in subsection (a), as limited by the
provisions of paragraph (1) of this subsection, bears to (ii)
the amount of the taxes described in subsection (a) before
applying the limitation contained in paragraph (1) of this
subsection.
(3) If the amount determined under subparagraph (B) of
paragraph (2) is less than the amount determined under
subparagraph (A) of that paragraph, then for purposes of
subsection (d) such lesser amount shall be the maximum credit
provided by subsection (b).
(e) Limitation based on amount of tax
The credit provided by this section shall not exceed the amount
of the tax imposed by section 2001, reduced by the amount of the
unified credit provided by section 2010.
(f) Termination
This section shall not apply to the estates of decedents dying
after December 31, 2004.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 374; Feb. 20, 1956, ch. 63, Sec.
3, 70 Stat. 24; Pub. L. 85-866, title I, Secs. 65(a), 102(c)(1),
Sept. 2, 1958, 72 Stat. 1657, 1674; Pub. L. 86-175, Sec. 3, Aug.
21, 1959, 73 Stat. 397; Pub. L. 94-455, title XIX, Secs.
1902(a)(12)(B), 1906(b)(13)(A), title XX, Secs. 2001(c)(1)(A),
2004(f)(3), Oct. 4, 1976, 90 Stat. 1806, 1834, 1849, 1872; Pub. L.
97-34, title IV, Sec. 422(e)(2), Aug. 13, 1981, 95 Stat. 316; Pub.
L. 107-16, title V, Secs. 531(a), 532(a), June 7, 2001, 115 Stat.
72, 73; Pub. L. 107-134, title I, Sec. 103(b)(1), Jan. 23, 2002,
115 Stat. 2431.)
-STATAMEND-
AMENDMENT OF SECTION
For termination of amendment by section 901 of Pub. L. 107-16,
see Effective and Termination Dates of 2001 Amendment note below.
-MISC1-
AMENDMENTS
2002 - Subsecs. (d) to (g). Pub. L. 107-134 redesignated subsecs.
(e) to (g) as (d) to (f), respectively, and struck out heading and
text of former subsec. (d). Text read as follows: "The basic estate
tax and the estate tax imposed by the Revenue Act of 1926 shall be
125 percent of the amount determined to be the maximum credit
provided by subsection (b). The additional estate tax shall be the
difference between the tax imposed by section 2001 or 2101 and the
basic estate tax."
2001 - Subsec. (b). Pub. L. 107-16, Secs. 531(a), 901,
temporarily designated existing provisions as pars. (1) and (3),
inserted headings, in par. (1) substituted "Except as provided in
paragraph (2), the credit allowed" for "The credit allowed", and
added par. (2). See Effective and Termination Dates of 2001
Amendment note below.
Subsec. (g). Pub. L. 107-16, Secs. 532(a), 901, temporarily added
subsec. (g). See Effective and Termination Dates of 2001 Amendment
note below.
1981 - Subsec. (c)(2). Pub. L. 97-34 struck out reference to
section 6166A.
1976 - Subsec. (a). Pub. L. 94-455, Sec. 1902(a)(12)(B), struck
out "or Territory" after "State".
Subsec. (b). Pub. L. 94-455, Sec. 2001(c)(1)(A)(i), (ii),
substituted "adjusted taxable estate" for "taxable estate" in two
places in table and inserted provision that, for purposes of this
section, "adjusted taxable estate" means the taxable estate reduced
by $60,000.
Subsec. (c)(2). Pub. L. 94-455, Sec. 2004(f)(3), substituted
"section 6161, 6166, or 6166A" for "section 6161".
Subsec. (c)(3). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out
"or his delegate" after "Secretary".
Subsec. (e). Pub. L. 94-455, Secs. 1902(a)(12)(B),
2001(c)(1)(A)(iii), substituted "adjusted taxable estate" for
"taxable estate" in par. (2) and struck out "or Territory" after
"imposed by a State" in provisions preceding par. (1).
Subsec. (f). Pub. L. 94-455, Sec. 2001(c)(1)(A)(iv), added
subsec. (f).
1959 - Subsec. (e). Pub. L. 86-175 substituted "imposed by a
State or Territory or the District of Columbia upon a transfer" for
"imposed upon a transfer" in introduction, "such deduction" for "a
deduction" in par. (1) and "such deduction" for "the deduction" in
two places in par. (2).
1958 - Subsec. (a). Pub. L. 85-866, Sec. 102(c)(1), struck out
"or any possession of the United States," after "District of
Columbia,".
Subsec. (c)(3). Pub. L. 85-866, Sec. 65(a), added par. (3).
1956 - Subsec. (e). Act Feb. 20, 1956, added subsec. (e).
EFFECTIVE DATE OF 2002 AMENDMENT
Pub. L. 107-134, title I, Sec. 103(d), Jan. 23, 2002, 115 Stat.
2431, provided that:
"(1) Effective date. - The amendments made by this section
[amending this section and sections 2053 and 2201 of this title]
shall apply to estates of decedents -
"(A) dying on or after September 11, 2001; and
"(B) in the case of individuals dying as a result of the April
19, 1995, terrorist attack, dying on or after April 19, 1995.
"(2) Waiver of limitations. - If refund or credit of any
overpayment of tax resulting from the amendments made by this
section is prevented at any time before the close of the 1-year
period beginning on the date of the enactment of this Act [Jan. 23,
2002] by the operation of any law or rule of law (including res
judicata), such refund or credit may nevertheless be made or
allowed if claim therefor is filed before the close of such
period."
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Pub. L. 107-16, title V, Sec. 531(b), June 7, 2001, 115 Stat. 73,
provided that: "The amendments made by this subsection [probably
means this section, amending this section] shall apply to estates
of decedents dying after December 31, 2001."
Pub. L. 107-16, title V, Sec. 532(d), June 7, 2001, 115 Stat. 75,
provided that: "The amendments made by this section [enacting
section 2058 of this title and amending this section and sections
2012 to 2016, 2053, 2056A, 2102, 2106, 2107, 2201, 2604, 6511, and
6612 of this title] shall apply to estates of decedents dying, and
generation-skipping transfers, after December 31, 2004."
Amendment by Pub. L. 107-16 inapplicable to estates of decedents
dying, gifts made, or generation skipping transfers, after Dec. 31,
2010, and the Internal Revenue Code of 1986 to be applied and
administered to such estates, gifts, and transfers as if such
amendment had never been enacted, see section 901 of Pub. L.
107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1981 AMENDMENT
Amendment by Pub. L. 97-34 applicable to estates of decedents
dying after Dec. 31, 1981, see section 422(f)(1) of Pub. L. 97-34,
set out as a note under section 6166 of this title.
EFFECTIVE DATE OF 1976 AMENDMENT
Section 1902(c)(1) of Pub. L. 94-455, as amended by Pub. L.
95-600, title VII, Sec. 703(j)(12), Nov. 6, 1978, 92 Stat. 2942,
provided that: "The amendments made by paragraphs (1) through (8),
and paragraphs (12)(A), (B), and (C), of subsection (a) and by
subsection (b) [amending this section and sections 2012, 2013,
2016, 2038, 2053, 2055, 2056, 2106, 2107, 2108, 2201, 6167, and
6503 of this title, repealing section 2202 of this title, and
enacting provisions set out as a note under section 2201 of this
title] shall apply in the case of estates of decedents dying after
the date of the enactment of this Act [Oct. 4, 1976], and the
amendment made by paragraph (9) of subsection (a) [amending section
2204 of this title] shall apply in the case of estates of decedents
dying after December 31, 1970."
Amendment by section 1902(a)(12)(B) of Pub. L. 94-455 applicable
with respect to gifts made after Dec. 31, 1976, see section
1902(c)(2) of Pub. L. 94-455, set out as a note under section 2501
of this title.
Amendment by section 2001(c)(1)(A) of Pub. L. 94-455 applicable
to estates of decedents dying after Dec. 31, 1976, see section
2001(d)(1) of Pub. L. 94-455, set out as a note under section 2001
of this title.
Amendment by section 2004(f)(3) of Pub. L. 94-455 applicable to
estates of decedents dying after Dec. 31, 1976, see section 2004(g)
of Pub. L. 94-455, set out as an Effective Date note under section
6166 of this title.
EFFECTIVE DATE OF 1959 AMENDMENT
Amendment by Pub. L. 86-175 applicable with respect to estates of
decedents dying on or after July 1, 1955, see section 4 of Pub. L.
86-175, set out as a note under section 2053 of this title.
EFFECTIVE DATE OF 1958 AMENDMENT
Section 65(c) of Pub. L. 85-866 provided that: "The amendment
made by subsection (a) [amending this section] shall apply with
respect to estates of decedents dying after August 16, 1954. The
amendment made by subsection (b) [amending this section] shall
apply with respect to estates of decedents dying after February 10,
1939, and on or before August 16, 1954."
Section 102(d) of Pub. L. 85-866 provided that: "The amendments
made by this section (other than by subsection (b)) [enacting
section 2208 of this title and amending this section and sections
2104 and 2053 of this title] shall apply to the estates of
decedents dying after the date of the enactment of this Act [Sept.
2, 1958]. The amendment made by subsection (b) [amending section
2501 of this title] shall apply to gifts made after the date of the
enactment of this Act."
EFFECTIVE DATE OF 1956 AMENDMENT
Amendment by act Feb. 20, 1956, applicable to the estates of all
decedents dying after Dec. 31, 1953, see section 4 of act Feb. 20,
1956, set out as a note under section 2053 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2012, 2013, 2014, 2015,
2016, 2053, 2056A, 2102, 2106, 2107, 6511, 6612 of this title.
-End-
-CITE-
26 USC Sec. 2012 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART II - CREDITS AGAINST TAX
-HEAD-
Sec. 2012. Credit for gift tax
-STATUTE-
(a) In general
If a tax on a gift has been paid under chapter 12 (sec. 2501 and
following), or under corresponding provisions of prior laws, and
thereafter on the death of the donor any amount in respect of such
gift is required to be included in the value of the gross estate of
the decedent for purposes of this chapter, then there shall be
credited against the tax imposed by section 2001 the amount of the
tax paid on a gift under chapter 12, or under corresponding
provisions of prior laws, with respect to so much of the property
which constituted the gift as is included in the gross estate,
except that the amount of such credit shall not exceed an amount
which bears the same ratio to the tax imposed by section 2001
(after deducting from such tax the credit for State death taxes
provided by section 2011 and the unified credit provided by section
2010) as the value (at the time of the gift or at the time of the
death, whichever is lower) of so much of the property which
constituted the gift as is included in the gross estate bears to
the value of the entire gross estate reduced by the aggregate
amount of the charitable and marital deductions allowed under
sections 2055, 2056, and 2106(a)(2).
(b) Valuation reductions
In applying, with respect to any gift, the ratio stated in
subsection (a), the value at the time of the gift or at the time of
the death, referred to in such ratio, shall be reduced -
(1) by such amount as will properly reflect the amount of such
gift which was excluded in determining (for purposes of section
2503(a)), or of corresponding provisions of prior laws, the total
amount of gifts made during the calendar quarter (or calendar
year if the gift was made before January 1, 1971) in which the
gift was made;
(2) if a deduction with respect to such gift is allowed under
section 2056(a) (relating to marital deduction), then by the
amount of such value, reduced as provided in paragraph (1); and
(3) if a deduction with respect to such gift is allowed under
sections 2055 or 2106(a)(2) (relating to charitable deduction),
then by the amount of such value, reduced as provided in
paragraph (1) of this subsection.
(c) Where gift considered made one-half by spouse
Where the decedent was the donor of the gift but, under the
provisions of section 2513, or corresponding provisions of prior
laws, the gift was considered as made one-half by his spouse -
(1) the term "the amount of the tax paid on a gift under
chapter 12", as used in subsection (a), includes the amounts paid
with respect to each half of such gift, the amount paid with
respect to each being computed in the manner provided in
subsection (d); and
(2) in applying, with respect to such gift, the ratio stated in
subsection (a), the value at the time of the gift or at the time
of the death, referred to in such ratio, includes such value with
respect to each half of such gift, each such value being reduced
as provided in paragraph (1) of subsection (b).
(d) Computation of amount of gift tax paid
(1) Amount of tax
For purposes of subsection (a), the amount of tax paid on a
gift under chapter 12, or under corresponding provisions of prior
laws, with respect to any gift shall be an amount which bears the
same ratio to the total tax paid for the calendar quarter (or
calendar year if the gift was made before January 1, 1971) in
which the gift was made as the amount of such gift bears to the
total amount of taxable gifts (computed without deduction of the
specific exemption) for such quarter or year.
(2) Amount of gift
For purposes of paragraph (1), the "amount of such gift" shall
be the amount included with respect to such gift in determining
(for the purposes of section 2503(a), or of corresponding
provisions of prior laws) the total amount of gifts made during
such quarter or year, reduced by the amount of any deduction
allowed with respect to such gift under section 2522, or under
corresponding provisions of prior laws (relating to charitable
deduction), or under section 2523 (relating to marital
deduction).
(e) Section inapplicable to gifts made after December 31, 1976
No credit shall be allowed under this section with respect to the
amount of any tax paid under chapter 12 on any gift made after
December 31, 1976.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 375; Pub. L. 91-614, title I,
Sec. 102(d)(2), Dec. 31, 1970, 84 Stat. 1841; Pub. L. 94-455, title
XIX, Sec. 1902(a)(1), title XX, Sec. 2001(a)(3), (c)(1)(B), Oct. 4,
1976, 90 Stat. 1804, 1848, 1850; Pub. L. 97-34, title IV, Sec.
403(a)(2)(A), Aug. 13, 1981, 95 Stat. 301; Pub. L. 107-16, title V,
Sec. 532(c)(1), June 7, 2001, 115 Stat. 73.)
-STATAMEND-
AMENDMENT OF SUBSECTION (A)
Pub. L. 107-16, title V, Sec. 532(c)(1), (d), title IX, Sec. 901,
June 7, 2001, 115 Stat. 73, 75, 150, provided that, applicable to
estates of decedents dying, and generation-skipping transfers,
after Dec. 31, 2004, subsection (a) of this section is temporarily
amended by striking out "the credit for State death taxes provided
by section 2011 and" before "the unified credit". See Effective and
Termination Dates of 2001 Amendment note below.
-MISC1-
AMENDMENTS
1981 - Subsec. (b)(2). Pub. L. 97-34 substituted "the amount of
such value, reduced as provided in paragraph (1)" for "an amount
which bears the same ratio to such value (reduced as provided in
paragraph (1) of this subsection) as the aggregate amount of the
marital deductions allowed under section 2056(a) bears to the
aggregate amount of such marital deductions computed without regard
to subsection (c) thereof".
1976 - Subsec. (a). Pub. L. 94-455, Sec. 2001(c)(1)(B),
substituted "provided by section 2011 and the unified credit
provided by section 2010" for "provided by section 2011".
Subsec. (b). Pub. L. 94-455, Sec. 1902(a)(1)(A), added heading
and substituted a comma for a dash after "deduction)" in pars. (2)
and (3).
Subsec. (c). Pub. L. 94-455, Sec. 1902(a)(1)(B), added heading.
Subsec. (d). Pub. L. 94-455, Sec. 1902(a)(1)(C), (D), added
headings for subsec. (d) and for pars. (1) and (2).
Subsec. (e). Pub. L. 94-455, Sec. 2001(a)(3), added subsec. (e).
1970 - Subsec. (b)(1). Pub. L. 91-614, Sec. 102(d)(2)(A),
substituted "the calendar quarter (or calendar year if the gift was
made before January 1, 1971)" for "the year".
Subsec. (d). Pub. L. 91-614, Sec. 102(d)(2)(B), substituted "such
quarter or year" for "such year" in two places.
Subsec. (d)(1). Pub. L. 91-614, Sec. 102(d)(2)(A), substituted
"the calendar quarter (or calendar year if the gift was made before
January 1, 1971)" for "the year".
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Amendment by Pub. L. 107-16 applicable to estates of decedents
dying, and generation-skipping transfers, after Dec. 31, 2004, see
section 532(d) of Pub. L. 107-16, set out as a note under section
2011 of this title.
Amendment by Pub. L. 107-16 inapplicable to estates of decedents
dying, gifts made, or generation skipping transfers, after Dec. 31,
2010, and the Internal Revenue Code of 1986 to be applied and
administered to such estates, gifts, and transfers as if such
amendment had never been enacted, see section 901 of Pub. L.
107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1981 AMENDMENT
Amendment by Pub. L. 97-34 applicable to estates of decedents
dying after Dec. 31, 1981, but inapplicable under certain
conditions under will executed before date which is 30 days after
Aug. 13, 1981, or under trust created by such date, see section
403(e) of Pub. L. 97-34, set out as a note under section 2056 of
this title.
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 1902(a)(1) of Pub. L. 94-455 applicable to
estates of decedents dying after Oct. 4, 1976, see section
1902(c)(1) of Pub. L. 94-455, set out as a note under section 2011
of this title.
Amendment by section 2001(a)(3), (c)(1)(B) of Pub. L. 94-455
applicable to estates of decedents dying after Dec. 31, 1976, see
section 2001(d)(1) of Pub. L. 94-455, set out as a note under
section 2001 of this title.
EFFECTIVE DATE OF 1970 AMENDMENT
Amendment by Pub. L. 91-614 applicable with respect to gifts made
after Dec. 31, 1970, see section 102(e) of Pub. L. 91-614, set out
as a note under section 2501 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2001, 2013, 2014, 2102,
2107 of this title.
-End-
-CITE-
26 USC Sec. 2013 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART II - CREDITS AGAINST TAX
-HEAD-
Sec. 2013. Credit for tax on prior transfers
-STATUTE-
(a) General rule
The tax imposed by section 2001 shall be credited with all or a
part of the amount of the Federal estate tax paid with respect to
the transfer of property (including property passing as a result of
the exercise or non-exercise of a power of appointment) to the
decedent by or from a person (herein designated as a "transferor")
who died within 10 years before, or within 2 years after, the
decedent's death. If the transferor died within 2 years of the
death of the decedent, the credit shall be the amount determined
under subsections (b) and (c). If the transferor predeceased the
decedent by more than 2 years, the credit shall be the following
percentage of the amount so determined -
(1) 80 percent, if within the third or fourth years preceding
the decedent's death;
(2) 60 percent, if within the fifth or sixth years preceding
the decedent's death;
(3) 40 percent, if within the seventh or eighth years preceding
the decedent's death; and
(4) 20 percent, if within the ninth or tenth years preceding
the decedent's death.
(b) Computation of credit
Subject to the limitation prescribed in subsection (c), the
credit provided by this section shall be an amount which bears the
same ratio to the estate tax paid (adjusted as indicated
hereinafter) with respect to the estate of the transferor as the
value of the property transferred bears to the taxable estate of
the transferor (determined for purposes of the estate tax)
decreased by any death taxes paid with respect to such estate. For
purposes of the preceding sentence, the estate tax paid shall be
the Federal estate tax paid increased by any credits allowed
against such estate tax under section 2012, or corresponding
provisions of prior laws, on account of gift tax, and for any
credits allowed against such estate tax under this section on
account of prior transfers where the transferor acquired property
from a person who died within 10 years before the death of the
decedent.
(c) Limitation on credit
(1) In general
The credit provided in this section shall not exceed the amount
by which -
(A) the estate tax imposed by section 2001 or section 2101
(after deducting the credits provided for in sections 2010,
2011, 2012, and 2014) computed without regard to this section,
exceeds
(B) such tax computed by excluding from the decedent's gross
estate the value of such property transferred and, if
applicable, by making the adjustment hereinafter indicated.
If any deduction is otherwise allowable under section 2055 or
section 2106(a)(2) (relating to charitable deduction) then, for
the purpose of the computation indicated in subparagraph (B), the
amount of such deduction shall be reduced by that part of such
deduction which the value of such property transferred bears to
the decedent's entire gross estate reduced by the deductions
allowed under sections 2053 and 2054, or section 2106(a)(1)
(relating to deduction for expenses, losses, etc.). For purposes
of this section, the value of such property transferred shall be
the value as provided for in subsection (d) of this section.
(2) Two or more transferors
If the credit provided in this section relates to property
received from 2 or more transferors, the limitation provided in
paragraph (1) of this subsection shall be computed by aggregating
the value of the property so transferred to the decedent. The
aggregate limitation so determined shall be apportioned in
accordance with the value of the property transferred to the
decedent by each transferor.
(d) Valuation of property transferred
The value of property transferred to the decedent shall be the
value used for the purpose of determining the Federal estate tax
liability of the estate of the transferor but -
(1) there shall be taken into account the effect of the tax
imposed by section 2001 or 2101, or any estate, succession,
legacy, or inheritance tax, on the net value to the decedent of
such property;
(2) where such property is encumbered in any manner, or where
the decedent incurs any obligation imposed by the transferor with
respect to such property, such encumbrance or obligation shall be
taken into account in the same manner as if the amount of a gift
to the decedent of such property was being determined; and
(3) if the decedent was the spouse of the transferor at the
time of the transferor's death, the net value of the property
transferred to the decedent shall be reduced by the amount
allowed under section 2056 (relating to marital deductions), as a
deduction from the gross estate of the transferor.
(e) Property defined
For purposes of this section, the term "property" includes any
beneficial interest in property, including a general power of
appointment (as defined in section 2041).
(f) Treatment of additional tax imposed under section 2032A
If section 2032A applies to any property included in the gross
estate of the transferor and an additional tax is imposed with
respect to such property under section 2032A(c) before the date
which is 2 years after the date of the decedent's death, for
purposes of this section -
(1) the additional tax imposed by section 2032A(c) shall be
treated as a Federal estate tax payable with respect to the
estate of the transferor; and
(2) the value of such property and the amount of the taxable
estate of the transferor shall be determined as if section 2032A
did not apply with respect to such property.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 377; Pub. L. 94-455, title XIX,
Sec. 1902(a)(2), title XX, Secs. 2001(c)(1)(C), 2003(c),
2006(b)(2), Oct. 4, 1976, 90 Stat. 1804, 1850, 1862, 1888; Pub. L.
99-514, title XIV, Sec. 1432(c)(2), Oct. 22, 1986, 100 Stat. 2730;
Pub. L. 100-647, title I, Sec. 1011A(g)(7), Nov. 10, 1988, 102
Stat. 3481; Pub. L. 105-34, title X, Sec. 1073(b)(2), Aug. 5, 1997,
111 Stat. 948; Pub. L. 107-16, title V, Sec. 532(c)(2), June 7,
2001, 115 Stat. 74.)
-STATAMEND-
AMENDMENT OF SUBSECTION (C)(1)(A)
Pub. L. 107-16, title V, Sec. 532(c)(2), (d), title IX, Sec. 901,
June 7, 2001, 115 Stat. 74, 75, 150, provided that, applicable to
estates of decedents dying, and generation-skipping transfers,
after Dec. 31, 2004, subsection (c)(1)(A) of this section is
temporarily amended by striking out "2011," after "sections 2010,".
See Effective and Termination Dates of 2001 Amendment note below.
-MISC1-
AMENDMENTS
1997 - Subsec. (g). Pub. L. 105-34 struck out heading and text of
subsec. (g). Prior to amendment, text read as follows: "For
purposes of this section, the estate tax paid shall not include any
portion of such tax attributable to section 4980A(d)."
1988 - Subsec. (g). Pub. L. 100-647 added subsec. (g).
1986 - Subsec. (g). Pub. L. 99-514 struck out subsec. (g) which
provided for treatment of tax imposed on certain
generation-skipping transfers.
1976 - Subsec. (b). Pub. L. 94-455, Sec. 2001(c)(1)(C)(i), struck
out "and increased by the exemption provided for by section 2052 or
section 2106(a)(3), or the corresponding provisions of prior laws,
in determining the taxable estate of the transferor for purposes of
the estate tax" after "death taxes paid with respect to such
estate".
Subsec. (c)(1)(A). Pub. L. 94-455, Sec. 2001(c)(1)(C)(ii),
substituted "credits provided for in sections 2010, 2011, 2012, and
2014) computed" for "credits for State death taxes, gift tax, and
foreign death taxes provided for in sections 2011, 2012, and 2014)
computed".
Subsec. (d)(3). Pub. L. 94-455, Sec. 1902(a)(2), struck out ", or
the corresponding provision of prior law," after "marital
deductions)".
Subsec. (f). Pub. L. 94-455, Sec. 2003(c), added subsec. (f).
Subsec. (g). Pub. L. 94-455, Sec. 2006(b)(2), added subsec. (g).
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Amendment by Pub. L. 107-16 applicable to estates of decedents
dying, and generation-skipping transfers, after Dec. 31, 2004, see
section 532(d) of Pub. L. 107-16, set out as a note under section
2011 of this title.
Amendment by Pub. L. 107-16 inapplicable to estates of decedents
dying, gifts made, or generation skipping transfers, after Dec. 31,
2010, and the Internal Revenue Code of 1986 to be applied and
administered to such estates, gifts, and transfers as if such
amendment had never been enacted, see section 901 of Pub. L.
107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by Pub. L. 105-34 applicable to estates of decedents
dying after Dec. 31, 1996, see section 1073(c) of Pub. L. 105-34,
set out as an Effective Date of Repeal note under section 4980A of
this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 effective, except as otherwise
provided, as if included in the provision of the Tax Reform Act of
1986, Pub. L. 99-514, to which such amendment relates, see section
1019(a) of Pub. L. 100-647, set out as a note under section 1 of
this title.
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by Pub. L. 99-514 applicable to generation-skipping
transfers (within the meaning of section 2611 of this title) made
after Oct. 22, 1986, except as otherwise provided, see section 1433
of Pub. L. 99-514, set out as an Effective Date note under section
2601 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2056, 2102, 2107 of this
title.
-End-
-CITE-
26 USC Sec. 2014 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART II - CREDITS AGAINST TAX
-HEAD-
Sec. 2014. Credit for foreign death taxes
-STATUTE-
(a) In general
The tax imposed by section 2001 shall be credited with the amount
of any estate, inheritance, legacy, or succession taxes actually
paid to any foreign country in respect of any property situated
within such foreign country and included in the gross estate (not
including any such taxes paid with respect to the estate of a
person other than the decedent). The determination of the country
within which property is situated shall be made in accordance with
the rules applicable under subchapter B (sec. 2101 and following)
in determining whether property is situated within or without the
United States.
(b) Limitations on credit
The credit provided in this section with respect to such taxes
paid to any foreign country -
(1) shall not, with respect to any such tax, exceed an amount
which bears the same ratio to the amount of such tax actually
paid to such foreign country as the value of property which is -
(A) situated within such foreign country,
(B) subjected to such tax, and
(C) included in the gross estate
bears to the value of all property subjected to such tax; and
(2) shall not, with respect to all such taxes, exceed an amount
which bears the same ratio to the tax imposed by section 2001
(after deducting from such tax the credits provided by sections
2010, 2011, and 2012) as the value of property which is -
(A) situated within such foreign country,
(B) subjected to the taxes of such foreign country, and
(C) included in the gross estate
bears to the value of the entire gross estate reduced by the
aggregate amount of the deductions allowed under sections 2055
and 2056.
(c) Valuation of property
(1) The values referred to in the ratio stated in subsection
(b)(1) are the values determined for purposes of the tax imposed by
such foreign country.
(2) The values referred to in the ratio stated in subsection
(b)(2) are the values determined under this chapter; but, in
applying such ratio, the value of any property described in
subparagraphs (A), (B), and (C) thereof shall be reduced by such
amount as will properly reflect, in accordance with regulations
prescribed by the Secretary, the deductions allowed in respect of
such property under sections 2055 and 2056 (relating to charitable
and marital deductions).
(d) Proof of credit
The credit provided in this section shall be allowed only if the
taxpayer establishes to the satisfaction of the Secretary -
(1) the amount of taxes actually paid to the foreign country,
(2) the amount and date of each payment thereof,
(3) the description and value of the property in respect of
which such taxes are imposed, and
(4) all other information necessary for the verification and
computation of the credit.
(e) Period of limitation
The credit provided in this section shall be allowed only for
such taxes as were actually paid and credit therefor claimed within
4 years after the filing of the return required by section 6018,
except that -
(1) If a petition for redetermination of a deficiency has been
filed with the Tax Court within the time prescribed in section
6213(a), then within such 4-year period or before the expiration
of 60 days after the decision of the Tax Court becomes final.
(2) If, under section 6161, an extension of time has been
granted for payment of the tax shown on the return, or of a
deficiency, then within such 4-year period or before the date of
the expiration of the period of the extension.
Refund based on such credit may (despite the provisions of sections
6511 and 6512) be made if claim therefor is filed within the period
above provided. Any such refund shall be made without interest.
(f) Additional limitation in cases involving a deduction under
section 2053(d)
In any case where a deduction is allowed under section 2053(d)
for an estate, succession, legacy, or inheritance tax imposed by
and actually paid to any foreign country upon a transfer by the
decedent for public, charitable, or religious uses described in
section 2055, the property described in subparagraphs (A), (B), and
(C) of paragraphs (1) and (2) of subsection (b) of this section
shall not include any property in respect of which such deduction
is allowed under section 2053(d).
(g) Possession of United States deemed a foreign country
For purposes of the credits authorized by this section, each
possession of the United States shall be deemed to be a foreign
country.
(h) Similar credit required for certain alien residents
Whenever the President finds that -
(1) a foreign country, in imposing estate, inheritance, legacy,
or succession taxes, does not allow to citizens of the United
States resident in such foreign country at the time of death a
credit similar to the credit allowed under subsection (a),
(2) such foreign country, when requested by the United States
to do so has not acted to provide such a similar credit in the
case of citizens of the United States resident in such foreign
country at the time of death, and
(3) it is in the public interest to allow the credit under
subsection (a) in the case of citizens or subjects of such
foreign country only if it allows such a similar credit in the
case of citizens of the United States resident in such foreign
country at the time of death,
the President shall proclaim that, in the case of citizens or
subjects of such foreign country dying while the proclamation
remains in effect, the credit under subsection (a) shall be allowed
only if such foreign country allows such a similar credit in the
case of citizens of the United States resident in such foreign
country at the time of death.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 378; Pub. L. 85-866, title I,
Sec. 102(c)(2), Sept. 2, 1958, 72 Stat. 1674; Pub. L. 86-175, Sec.
2, Aug. 21, 1959, 73 Stat. 397; Pub. L. 89-809, title I, Sec.
106(b)(3), Nov. 13, 1966, 80 Stat. 1570; Pub. L. 94-455, title XIX,
Sec. 1906(b)(13)(A), title XX, Sec. 2001(c)(1)(G), Oct. 4, 1976, 90
Stat. 1834, 1852; Pub. L. 107-16, title V, Sec. 532(c)(3), June 7,
2001, 115 Stat. 74.)
-STATAMEND-
AMENDMENT OF SUBSECTION (B)(2)
Pub. L. 107-16, title V, Sec. 532(c)(3), (d), title IX, Sec. 901,
June 7, 2001, 115 Stat. 74, 75, 150, provided that, applicable to
estates of decedents dying, and generation-skipping transfers,
after Dec. 31, 2004, subsection (b)(2) of this section is
temporarily amended by striking out ", 2011," after "sections
2010". See Effective and Termination Dates of 2001 Amendment note
below.
-MISC1-
AMENDMENTS
1976 - Subsec. (b)(2). Pub. L. 94-455, Sec. 2001(c)(1)(G),
inserted reference to section 2010 in introductory provisions.
Subsecs. (c), (d). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck
out "or his delegate" after "Secretary".
1966 - Subsec. (a). Pub. L. 89-809 struck out provision that, if
the decedent at the time of his death was not a citizen of the
United States, credit would not be allowed under this section
unless the foreign country of which the decedent was a citizen or
subject, in imposing estate, inheritance, legacy, or succession
taxes, allows a similar credit in the case of a citizen of the
United States resident in such country.
Subsec. (h). Pub. L. 89-809 added subsec. (h).
1959 - Subsecs. (f), (g). Pub. L. 86-175 added subsec. (f) and
redesignated former subsec. (f) as (g).
1958 - Subsec. (f). Pub. L. 85-866 added subsec. (f).
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Amendment by Pub. L. 107-16 applicable to estates of decedents
dying, and generation-skipping transfers, after Dec. 31, 2004, see
section 532(d) of Pub. L. 107-16, set out as a note under section
2011 of this title.
Amendment by Pub. L. 107-16 inapplicable to estates of decedents
dying, gifts made, or generation skipping transfers, after Dec. 31,
2010, and the Internal Revenue Code of 1986 to be applied and
administered to such estates, gifts, and transfers as if such
amendment had never been enacted, see section 901 of Pub. L.
107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1966 AMENDMENT
Amendment by Pub. L. 89-809 applicable with respect to estates of
decedents dying after Nov. 13, 1966, see section 106(b)(4) of Pub.
L. 89-809, set out as a note under section 901 of this title.
EFFECTIVE DATE OF 1959 AMENDMENT
Amendment by Pub. L. 86-175 applicable with respect to estates of
decedents dying on or after July 1, 1955, see section 4 of Pub. L.
86-175, set out as a note under section 2053 of this title.
EFFECTIVE DATE OF 1958 AMENDMENT
Amendment by Pub. L. 85-866 applicable to estates of decedents
dying after Sept. 2, 1958, see section 102(d) of Pub. L. 85-866,
set out as a note under section 2011 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2013, 2015, 2016, 2053,
2056A, 6511, 6612 of this title.
-End-
-CITE-
26 USC Sec. 2015 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART II - CREDITS AGAINST TAX
-HEAD-
Sec. 2015. Credit for death taxes on remainders
-STATUTE-
Where an election is made under section 6163(a) to postpone
payment of the tax imposed by section 2001, or 2101, such part of
any estate, inheritance, legacy, or succession taxes allowable as a
credit under section 2011 or 2014, as is attributable to a
reversionary or remainder interest may be allowed as a credit
against the tax attributable to such interest, subject to the
limitations on the amount of the credit contained in such sections,
if such part is paid, and credit therefor claimed, at any time
before the expiration of the time for payment of the tax imposed by
section 2001 or 2101 as postponed and extended under section 6163.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 379; Pub. L. 85-866, title I,
Sec. 66(a)(1), Sept. 2, 1958, 72 Stat. 1657; Pub. L. 107-16, title
V, Sec. 532(c)(4), June 7, 2001, 115 Stat. 74.)
-STATAMEND-
AMENDMENT OF SECTION
Pub. L. 107-16, title V, Sec. 532(c)(4), (d), title IX, Sec. 901,
June 7, 2001, 115 Stat. 74, 75, 150, provided that, applicable to
estates of decedents dying, and generation-skipping transfers,
after Dec. 31, 2004, this section is temporarily amended by
striking out "2011 or" before "2014". See Effective and Termination
Dates of 2001 Amendment note below.
-MISC1-
AMENDMENTS
1958 - Pub. L. 85-866 substituted "the time for payment of the
tax imposed by section 2001 or 2101 as postponed and extended under
section 6163" for "60 days after the termination of the precedent
interest or interests in the property".
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Amendment by Pub. L. 107-16 applicable to estates of decedents
dying, and generation-skipping transfers, after Dec. 31, 2004, see
section 532(d) of Pub. L. 107-16, set out as a note under section
2011 of this title.
Amendment by Pub. L. 107-16 inapplicable to estates of decedents
dying, gifts made, or generation skipping transfers, after Dec. 31,
2010, and the Internal Revenue Code of 1986 to be applied and
administered to such estates, gifts, and transfers as if such
amendment had never been enacted, see section 901 of Pub. L.
107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1958 AMENDMENT
Section 66(a)(3) of Pub. L. 85-866 provided that: "The amendments
made by paragraphs (1) and (2) [amending this section and section
927 of I.R.C. 1939] shall apply in the case of any reversionary or
remainder interest in property only if the precedent interest or
interests in the property did not terminate before the beginning of
the 60-day period which ends on the date of the enactment of this
Act [Sept. 2, 1958]."
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in section 6511 of this title.
-End-
-CITE-
26 USC Sec. 2016 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART II - CREDITS AGAINST TAX
-HEAD-
Sec. 2016. Recovery of taxes claimed as credit
-STATUTE-
If any tax claimed as a credit under section 2011 or 2014 is
recovered from any foreign country, the executor, or any other
person or persons recovering such amount, shall give notice of such
recovery to the Secretary at such time and in such manner as may be
required by regulations prescribed by him, and the Secretary shall
(despite the provisions of section 6501) redetermine the amount of
the tax under this chapter and the amount, if any, of the tax due
on such redetermination, shall be paid by the executor or such
person or persons, as the case may be, on notice and demand. No
interest shall be assessed or collected on any amount of tax due on
any redetermination by the Secretary resulting from a refund to the
executor of tax claimed as a credit under section 2014, for any
period before the receipt of such refund, except to the extent
interest was paid by the foreign country on such refund.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 380; Pub. L. 94-455, title XIX,
Secs. 1902(a)(12)(C), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1806,
1834; Pub. L. 107-16, title V, Sec. 532(c)(4), June 7, 2001, 115
Stat. 74; Pub. L. 107-147, title IV, Sec. 411(h), Mar. 9, 2002, 116
Stat. 46.)
-STATAMEND-
AMENDMENT OF SECTION
Pub. L. 107-16, title V, Sec. 532(c)(4), (d), title IX, Sec. 901,
June 7, 2001, 115 Stat. 74, 75, 150, provided that, applicable to
estates of decedents dying, and generation-skipping transfers,
after Dec. 31, 2004, this section is temporarily amended by
striking out "2011 or" before "2014 is recovered". See Effective
and Termination Dates of 2001 Amendment note below.
-MISC1-
AMENDMENTS
2002 - Pub. L. 107-147 struck out "any State, any possession of
the United States, or the District of Columbia," after "any foreign
country,".
1976 - Pub. L. 94-455 struck out "Territory or" after "any State,
any" and "or his delegate" after "Secretary".
EFFECTIVE DATE OF 2002 AMENDMENT
Amendment by Pub. L. 107-147 effective as if included in the
provisions of the Economic Growth and Tax Relief Reconciliation Act
of 2001, Pub. L. 107-16, to which such amendment relates, see
section 411(x) of Pub. L. 107-147, set out as a note under section
25B of this title.
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Amendment by Pub. L. 107-16 applicable to estates of decedents
dying, and generation-skipping transfers, after Dec. 31, 2004, see
section 532(d) of Pub. L. 107-16, set out as a note under section
2011 of this title.
Amendment by Pub. L. 107-16 inapplicable to estates of decedents
dying, gifts made, or generation skipping transfers, after Dec. 31,
2010, and the Internal Revenue Code of 1986 to be applied and
administered to such estates, gifts, and transfers as if such
amendment had never been enacted, see section 901 of Pub. L.
107-16, set out as a note under section 1 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 6040, 6213, 6501 of this
title.
-End-
-CITE-
26 USC PART III - GROSS ESTATE 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
PART III - GROSS ESTATE
-MISC1-
Sec.
2031. Definition of gross estate.
2032. Alternate valuation.
2032A. Valuation of certain farm, etc., real property.
2033. Property in which the decedent had an interest.
[2033A. Repealed.]
2034. Dower or curtesy interests.
2035. Adjustments for certain gifts made within 3 years of
decedent's death.
2036. Transfers with retained life estate.
2037. Transfers taking effect at death.
2038. Revocable transfers.
2039. Annuities.
2040. Joint interests.
2041. Powers of appointment.
2042. Proceeds of life insurance.
2043. Transfers for insufficient consideration.
2044. Certain property for which marital deduction was
previously allowed.
2045. Prior interests.
2046. Disclaimers.
AMENDMENTS
1998 - Pub. L. 105-206, title VI, Sec. 6007(b)(1)(E), July 22,
1998, 112 Stat. 808, struck out item 2033A "Family-owned business
exclusion".
1997 - Pub. L. 105-34, title V, Sec. 502(b), title XIII, Sec.
1310(b), Aug. 5, 1997, 111 Stat. 852, 1044, added item 2033A and
substituted "certain gifts" for "gifts" in item 2035.
1981 - Pub. L. 97-34, title IV, Sec. 403(d)(3)(A)(ii), Aug. 13,
1981, 95 Stat. 304, added item 2044 and redesignated former items
2044 and 2045 as items 2045 and 2046, respectively.
1976 - Pub. L. 94-455, title XX, Secs. 2001(c)(1)(N)(iii),
2003(d)(1), 2009(b)(3)(B), Oct. 4, 1976, 90 Stat. 1853, 1862, 1894,
added items 2032A and 2045 and substituted "Adjustments for gifts
made within 3 years of decedent's death" for "Transactions in
contemplation of death" in item 2035.
-End-
-CITE-
26 USC Sec. 2031 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
Sec. 2031. Definition of gross estate
-STATUTE-
(a) General
The value of the gross estate of the decedent shall be determined
by including to the extent provided for in this part, the value at
the time of his death of all property, real or personal, tangible
or intangible, wherever situated.
(b) Valuation of unlisted stock and securities
In the case of stock and securities of a corporation the value of
which, by reason of their not being listed on an exchange and by
reason of the absence of sales thereof, cannot be determined with
reference to bid and asked prices or with reference to sales
prices, the value thereof shall be determined by taking into
consideration, in addition to all other factors, the value of stock
or securities of corporations engaged in the same or a similar line
of business which are listed on an exchange.
(c) Estate tax with respect to land subject to a qualified
conservation easement
(1) In general
If the executor makes the election described in paragraph (6),
then, except as otherwise provided in this subsection, there
shall be excluded from the gross estate the lesser of -
(A) the applicable percentage of the value of land subject to
a qualified conservation easement, reduced by the amount of any
deduction under section 2055(f) with respect to such land, or
(B) the exclusion limitation.
(2) Applicable percentage
For purposes of paragraph (1), the term "applicable percentage"
means 40 percent reduced (but not below zero) by 2 percentage
points for each percentage point (or fraction thereof) by which
the value of the qualified conservation easement is less than 30
percent of the value of the land (!1) (determined without regard
to the value of such easement and reduced by the value of any
retained development right (as defined in paragraph (5)). The
values taken into account under the preceding sentence shall be
such values as of the date of the contribution referred to in
paragraph (8)(B).
(3) Exclusion limitation
For purposes of paragraph (1), the exclusion limitation is the
limitation determined in accordance with the following table:
In the case of estates of The exclusion
decedents dying during: limitation is:
1998 $100,000
1999 $200,000
2000 $300,000
2001 $400,000
2002 or thereafter $500,000.
(4) Treatment of certain indebtedness
(A) In general
The exclusion provided in paragraph (1) shall not apply to
the extent that the land is debt-financed property.
(B) Definitions
For purposes of this paragraph -
(i) Debt-financed property
The term "debt-financed property" means any property with
respect to which there is an acquisition indebtedness (as
defined in clause (ii)) on the date of the decedent's death.
(ii) Acquisition indebtedness
The term "acquisition indebtedness" means, with respect to
debt-financed property, the unpaid amount of -
(I) the indebtedness incurred by the donor in acquiring
such property,
(II) the indebtedness incurred before the acquisition of
such property if such indebtedness would not have been
incurred but for such acquisition,
(III) the indebtedness incurred after the acquisition of
such property if such indebtedness would not have been
incurred but for such acquisition and the incurrence of
such indebtedness was reasonably foreseeable at the time of
such acquisition, and
(IV) the extension, renewal, or refinancing of an
acquisition indebtedness.
(5) Treatment of retained development right
(A) In general
Paragraph (1) shall not apply to the value of any development
right retained by the donor in the conveyance of a qualified
conservation easement.
(B) Termination of retained development right
If every person in being who has an interest (whether or not
in possession) in the land executes an agreement to extinguish
permanently some or all of any development rights (as defined
in subparagraph (D)) retained by the donor on or before the
date for filing the return of the tax imposed by section 2001,
then any tax imposed by section 2001 shall be reduced
accordingly. Such agreement shall be filed with the return of
the tax imposed by section 2001. The agreement shall be in such
form as the Secretary shall prescribe.
(C) Additional tax
Any failure to implement the agreement described in
subparagraph (B) not later than the earlier of -
(i) the date which is 2 years after the date of the
decedent's death, or
(ii) the date of the sale of such land subject to the
qualified conservation easement,
shall result in the imposition of an additional tax in the
amount of the tax which would have been due on the retained
development rights subject to such agreement. Such additional
tax shall be due and payable on the last day of the 6th month
following such date.
(D) Development right defined
For purposes of this paragraph, the term "development right"
means any right to use the land subject to the qualified
conservation easement in which such right is retained for any
commercial purpose which is not subordinate to and directly
supportive of the use of such land as a farm for farming
purposes (within the meaning of section 2032A(e)(5)).
(6) Election
The election under this subsection shall be made on or before
the due date (including extensions) for filing the return of tax
imposed by section 2001 and shall be made on such return. Such an
election, once made, shall be irrevocable.
(7) Calculation of estate tax due
An executor making the election described in paragraph (6)
shall, for purposes of calculating the amount of tax imposed by
section 2001, include the value of any development right (as
defined in paragraph (5)) retained by the donor in the conveyance
of such qualified conservation easement. The computation of tax
on any retained development right prescribed in this paragraph
shall be done in such manner and on such forms as the Secretary
shall prescribe.
(8) Definitions
For purposes of this subsection -
(A) Land subject to a qualified conservation easement
The term "land subject to a qualified conservation easement"
means land -
(i) which is located in the United States or any possession
of the United States,
(ii) which was owned by the decedent or a member of the
decedent's family at all times during the 3-year period
ending on the date of the decedent's death, and
(iii) with respect to which a qualified conservation
easement has been made by an individual described in
subparagraph (C), as of the date of the election described in
paragraph (6).
(B) Qualified conservation easement
The term "qualified conservation easement" means a qualified
conservation contribution (as defined in section 170(h)(1)) of
a qualified real property interest (as defined in section
170(h)(2)(C)), except that clause (iv) of section 170(h)(4)(A)
shall not apply, and the restriction on the use of such
interest described in section 170(h)(2)(C) shall include a
prohibition on more than a de minimis use for a commercial
recreational activity.
(C) Individual described
An individual is described in this subparagraph if such
individual is -
(i) the decedent,
(ii) a member of the decedent's family,
(iii) the executor of the decedent's estate, or
(iv) the trustee of a trust the corpus of which includes
the land to be subject to the qualified conservation
easement.
(D) Member of family
The term "member of the decedent's family" means any member
of the family (as defined in section 2032A(e)(2)) of the
decedent.
(9) Treatment of easements granted after death
In any case in which the qualified conservation easement is
granted after the date of the decedent's death and on or before
the due date (including extensions) for filing the return of tax
imposed by section 2001, the deduction under section 2055(f) with
respect to such easement shall be allowed to the estate but only
if no charitable deduction is allowed under chapter 1 to any
person with respect to the grant of such easement.
(10) Application of this section to interests in partnerships,
corporations, and trusts
This section shall apply to an interest in a partnership,
corporation, or trust if at least 30 percent of the entity is
owned (directly or indirectly) by the decedent, as determined
under the rules described in section 2057(e)(3).
(d) Cross reference
For executor's right to be furnished on request a statement
regarding any valuation made by the Secretary within the gross
estate, see section 7517.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 380; Pub. L. 87-834, Sec.
18(a)(1), Oct. 16, 1962, 76 Stat. 1052; Pub. L. 94-455, title XX,
Sec. 2008(a)(2)(A), Oct. 4, 1976, 90 Stat. 1891; Pub. L. 105-34,
title V, Sec. 508(a), Aug. 5, 1997, 111 Stat. 857; Pub. L. 105-206,
title VI, Sec. 6007(g), July 22, 1998, 112 Stat. 810; Pub. L.
105-277, div. J, title IV, Sec. 4006(c)(3), Oct. 21, 1998, 112
Stat. 2681-913; Pub. L. 107-16, title V, Sec. 551(a), (b), June 7,
2001, 115 Stat. 86.)
-STATAMEND-
AMENDMENT OF SECTION
For termination of amendment by section 901 of Pub. L. 107-16,
see Effective and Termination Dates of 2001 Amendment note below.
-MISC1-
AMENDMENTS
2001 - Subsec. (c)(2). Pub. L. 107-16, Secs. 551(b), 901,
temporarily inserted at end "The values taken into account under
the preceding sentence shall be such values as of the date of the
contribution referred to in paragraph (8)(B)." See Effective and
Termination Dates of 2001 Amendment note below.
Subsec. (c)(8)(A)(i). Pub. L. 107-16, Secs. 551(a), 901,
temporarily amended cl. (i) generally. Prior to amendment, cl. (i)
read as follows: "which is located -
"(I) in or within 25 miles of an area which, on the date of the
decedent's death, is a metropolitan area (as defined by the
Office of Management and Budget),
"(II) in or within 25 miles of an area which, on the date of
the decedent's death, is a national park or wilderness area
designated as part of the National Wilderness Preservation System
(unless it is determined by the Secretary that land in or within
25 miles of such a park or wilderness area is not under
significant development pressure), or
"(III) in or within 10 miles of an area which, on the date of
the decedent's death, is an Urban National Forest (as designated
by the Forest Service),".
See Effective and Termination Dates of 2001 Amendment note below.
1998 - Subsec. (c)(6). Pub. L. 105-206, Sec. 6007(g)(2),
substituted "on or before the due date (including extensions) for
filing the return of tax imposed by section 2001 and shall be made
on such return." for "on the return of the tax imposed by section
2001."
Subsec. (c)(9). Pub. L. 105-206, Sec. 6007(g)(1), added par. (9).
Former par. (9) redesignated (10).
Subsec. (c)(10). Pub. L. 105-277, Sec. 4006(c)(3), substituted
"section 2057(e)(3)" for "section 2033A(e)(3)".
Pub. L. 105-206, Sec. 6007(g)(1), redesignated par. (9) as (10).
1997 - Subsecs. (c), (d). Pub. L. 105-34 added subsec. (c) and
redesignated former subsec. (c) as (d).
1976 - Subsec. (c). Pub. L. 94-455 added subsec. (c).
1962 - Subsec. (a). Pub. L. 87-834 struck out provisions which
excepted real property situated outside the United States.
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Pub. L. 107-16, title V, Sec. 551(c), June 7, 2001, 115 Stat. 86,
provided that: "The amendments made by this section [amending this
section] shall apply to estates of decedents dying after December
31, 2000."
Amendment by Pub. L. 107-16 inapplicable to estates of decedents
dying, gifts made, or generation skipping transfers, after Dec. 31,
2010, and the Internal Revenue Code of 1986 to be applied and
administered to such estates, gifts, and transfers as if such
amendment had never been enacted, see section 901 of Pub. L.
107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1998 AMENDMENT
Amendment by Pub. L. 105-206 effective, except as otherwise
provided, as if included in the provisions of the Taxpayer Relief
Act of 1997, Pub. L. 105-34, to which such amendment relates, see
section 6024 of Pub. L. 105-206, set out as a note under section 1
of this title.
EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by Pub. L. 105-34 applicable to estates of decedents
dying after Dec. 31, 1997, see section 508(e)(1) of Pub. L. 105-34,
set out as a note under section 1014 of this title.
EFFECTIVE DATE OF 1962 AMENDMENT
Section 18(b) of Pub. L. 87-834 provided that:
"(1) Except as provided in paragraph (2), the amendments made by
subsection (a) [amending this section and sections 2033, 2034,
2035, 2036, 2037, 2038, 2040, and 2041 of this title] shall apply
to the estates of decedents dying after the date of the enactment
of this Act [Oct. 16, 1962].
"(2) In the case of a decedent dying after the date of the
enactment of this Act [Oct. 16, 1962] and before July 1, 1964, the
value of real property situated outside of the United States shall
not be included in the gross estate (as defined in section 2031(a))
of the decedent -
"(A) under section 2033, 2034, 2035(a), 2036(a), 2037(a), or
2038(a) to the extent the real property, or the decedent's
interest in it, was acquired by the decedent before February 1,
1962;
"(B) under section 2040 to the extent such property or interest
was acquired by the decedent before February 1, 1962, or was held
by the decedent and the survivor in a joint tenancy or tenancy by
the entirety before February 1, 1962; or
"(C) under section 2041(a) to the extent that before February
1, 1962, such property or interest was subject to a general power
of appointment (as defined in section 2041) possessed by the
decedent.
In the case of real property, or an interest therein, situated
outside of the United States (including a general power of
appointment in respect of such property or interest, and including
property held by the decedent and the survivor in a joint tenancy
or tenancy by the entirety) which was acquired by the decedent
after January 31, 1962, by gift within the meaning of section 2511,
or from a prior decedent by devise or inheritance, or by reason of
death, form of ownership, or other conditions (including the
exercise or nonexercise of a power of appointment), for purposes of
this paragraph such property or interest therein shall be deemed to
have been acquired by the decedent before February 1, 1962, if
before that date the donor or prior decedent had acquired the
property or his interest therein or had possessed a power of
appointment in respect of the property or interest."
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 1014, 2103, 7520 of this
title; title 43 section 1620.
-FOOTNOTE-
(!1) So in original. No closing parenthesis was enacted.
-End-
-CITE-
26 USC Sec. 2032 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
Sec. 2032. Alternate valuation
-STATUTE-
(a) General
The value of the gross estate may be determined, if the executor
so elects, by valuing all the property included in the gross estate
as follows:
(1) In the case of property distributed, sold, exchanged, or
otherwise disposed of, within 6 months after the decedent's death
such property shall be valued as of the date of distribution,
sale, exchange, or other disposition.
(2) In the case of property not distributed, sold, exchanged,
or otherwise disposed of, within 6 months after the decedent's
death such property shall be valued as of the date 6 months after
the decedent's death.
(3) Any interest or estate which is affected by mere lapse of
time shall be included at its value as of the time of death
(instead of the later date) with adjustment for any difference in
its value as of the later date not due to mere lapse of time.
(b) Special rules
No deduction under this chapter of any item shall be allowed if
allowance for such items is in effect given by the alternate
valuation provided by this section. Wherever in any other
subsection or section of this chapter reference is made to the
value of property at the time of the decedent's death, such
reference shall be deemed to refer to the value of such property
used in determining the value of the gross estate. In case of an
election made by the executor under this section, then -
(1) for purposes of the charitable deduction under section 2055
or 2106(a)(2), any bequest, legacy, devise, or transfer
enumerated therein, and
(2) for the purpose of the marital deduction under section
2056, any interest in property passing to the surviving spouse,
shall be valued as of the date of the decedent's death with
adjustment for any difference in value (not due to mere lapse of
time or the occurrence or nonoccurrence of a contingency) of the
property as of the date 6 months after the decedent's death
(substituting, in the case of property distributed by the executor
or trustee, or sold, exchanged, or otherwise disposed of, during
such 6-month period, the date thereof).
(c) Election must decrease gross estate and estate tax
No election may be made under this section with respect to an
estate unless such election will decrease -
(1) the value of the gross estate, and
(2) the sum of the tax imposed by this chapter and the tax
imposed by chapter 13 with respect to property includible in the
decedent's gross estate (reduced by credits allowable against
such taxes).
(d) Election
(1) In general
The election provided for in this section shall be made by the
executor on the return of the tax imposed by this chapter. Such
election, once made, shall be irrevocable.
(2) Exception
No election may be made under this section if such return is
filed more than 1 year after the time prescribed by law
(including extensions) for filing such return.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 381; Pub. L. 91-614, title I,
Sec. 101(a), Dec. 31, 1970, 84 Stat. 1836; Pub. L. 98-369, div. A,
title X, Secs. 1023(a), 1024(a), July 18, 1984, 98 Stat. 1030; Pub.
L. 99-514, title XIV, Sec. 1432(c)(1), Oct. 22, 1986, 100 Stat.
2730.)
-MISC1-
AMENDMENTS
1986 - Subsec. (c)(2). Pub. L. 99-514 amended par. (2) generally.
Prior to amendment, par. (2) read as follows: "the amount of the
tax imposed by this chapter (reduced by credits allowable against
such tax)."
1984 - Subsec. (c). Pub. L. 98-369, Sec. 1023(a), added subsec.
(c). Former subsec. (c) redesignated (d).
Subsec. (d). Pub. L. 98-369, Sec. 1024(a), substituted "Election"
for "Time of election" in heading, designated existing text as par.
(1), inserted heading "In general", substituted "shall be made by
the executor on the return of the tax imposed by this chapter" for
"shall be exercised by the executor on his return if filed within
the time prescribed by law or before the expiration of any
extension of time granted pursuant to law for the filing of the
return", inserted sentence providing that an election, once made,
is irrevocable, and added par. (2).
Pub. L. 98-369, Sec. 1023(a), redesignated subsec. (c) as (d).
1970 - Pub. L. 91-614 substituted "6 months" for "1 year" in four
places and substituted "6-month" for "1-year".
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by Pub. L. 99-514 applicable to generation-skipping
transfers (within the meaning of section 2611 of this title) made
after Oct. 22, 1986, except as otherwise provided, see section 1433
of Pub. L. 99-514, set out as an Effective Date note under section
2601 of this title.
EFFECTIVE DATE OF 1984 AMENDMENT
Section 1023(b) of Pub. L. 98-369 provided that: "The amendments
made by subsection (a) [amending this section] shall apply with
respect to estates of decedents dying after the date of the
enactment of this Act [July 18, 1984]."
Section 1024(b) of Pub. L. 98-369, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
"(1) In general. - The amendment made by subsection (a) [amending
this section] shall apply to estates of decedents dying after the
date of the enactment of this Act [July 18, 1984].
"(2) Transitional rule. - In the case of an estate of a decedent
dying before the date of the enactment of this Act [July 18, 1984]
if -
"(A) a credit or refund of the tax imposed by chapter 11 of the
Internal Revenue Code of 1986 [formerly I.R.C. 1954] is not
prevented on the date of the enactment of this Act by the
operation of any law or rule of law,
"(B) the election under section 2032 of the Internal Revenue
Code of 1986 would have met the requirements of such section (as
amended by this section and section 1023) had the decedent died
after the date of enactment of this Act, and
"(C) a claim for credit or refund of such tax with respect to
such estate is filed not later than the 90th day after the date
of the enactment of this Act,
then such election shall be treated as a valid election under such
section 2032. The statutory period for the assessment of any
deficiency which is attributable to an election under this
paragraph shall not expire before the close of the 2-year period
beginning on the date of the enactment of this Act."
EFFECTIVE DATE OF 1970 AMENDMENT
Section 101(j) of Pub. L. 91-614 provided that: "The amendments
made by this section [enacting section 6905 of this title, amending
this section and sections 1223, 2055, 2204, 6040, 6075, 6091, 6161,
6314, 6324, and 6504 of this title, and enacting provisions set out
as notes under this section and sections 2204 and 6905 of this
title] (other than subsection (f)) [amending sections 2204 and 6905
of this title] shall apply with respect to decedents dying after
December 31, 1970."
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 996, 1014, 1016, 2055,
2056A, 2106, 2624 of this title.
-End-
-CITE-
26 USC Sec. 2032A 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
Sec. 2032A. Valuation of certain farm, etc., real property
-STATUTE-
(a) Value based on use under which property qualifies
(1) General rule
If -
(A) the decedent was (at the time of his death) a citizen or
resident of the United States, and
(B) the executor elects the application of this section and
files the agreement referred to in subsection (d)(2),
then, for purposes of this chapter, the value of qualified real
property shall be its value for the use under which it qualifies,
under subsection (b), as qualified real property.
(2) Limitation on aggregate reduction in fair market value
The aggregate decrease in the value of qualified real property
taken into account for purposes of this chapter which results
from the application of paragraph (1) with respect to any
decedent shall not exceed $750,000.
(3) Inflation adjustment
In the case of estates of decedents dying in a calendar year
after 1998, the $750,000 amount contained in paragraph (2) shall
be increased by an amount equal to -
(A) $750,000, multiplied by
(B) the cost-of-living adjustment determined under section
1(f)(3) for such calendar year by substituting "calendar year
1997" for "calendar year 1992" in subparagraph (B) thereof.
If any amount as adjusted under the preceding sentence is not a
multiple of $10,000, such amount shall be rounded to the next
lowest multiple of $10,000.
(b) Qualified real property
(1) In general
For purposes of this section, the term "qualified real
property" means real property located in the United States which
was acquired from or passed from the decedent to a qualified heir
of the decedent and which, on the date of the decedent's death,
was being used for a qualified use by the decedent or a member of
the decedent's family, but only if -
(A) 50 percent or more of the adjusted value of the gross
estate consists of the adjusted value of real or personal
property which -
(i) on the date of the decedent's death, was being used for
a qualified use by the decedent or a member of the decedent's
family, and
(ii) was acquired from or passed from the decedent to a
qualified heir of the decedent.
(B) 25 percent or more of the adjusted value of the gross
estate consists of the adjusted value of real property which
meets the requirements of subparagraphs (A)(ii) and (C),
(C) during the 8-year period ending on the date of the
decedent's death there have been periods aggregating 5 years or
more during which -
(i) such real property was owned by the decedent or a
member of the decedent's family and used for a qualified use
by the decedent or a member of the decedent's family, and
(ii) there was material participation by the decedent or a
member of the decedent's family in the operation of the farm
or other business, and
(D) such real property is designated in the agreement
referred to in subsection (d)(2).
(2) Qualified use
For purposes of this section, the term "qualified use" means
the devotion of the property to any of the following:
(A) use as a farm for farming purposes, or
(B) use in a trade or business other than the trade or
business of farming.
(3) Adjusted value
For purposes of paragraph (1), the term "adjusted value" means
-
(A) in the case of the gross estate, the value of the gross
estate for purposes of this chapter (determined without regard
to this section), reduced by any amounts allowable as a
deduction under paragraph (4) of section 2053(a), or
(B) in the case of any real or personal property, the value
of such property for purposes of this chapter (determined
without regard to this section), reduced by any amounts
allowable as a deduction in respect of such property under
paragraph (4) of section 2053(a).
(4) Decedents who are retired or disabled
(A) In general
If, on the date of the decedent's death, the requirements of
paragraph (1)(C)(ii) with respect to the decedent for any
property are not met, and the decedent -
(i) was receiving old-age benefits under title II of the
Social Security Act for a continuous period ending on such
date, or
(ii) was disabled for a continuous period ending on such
date,
then paragraph (1)(C)(ii) shall be applied with respect to such
property by substituting "the date on which the longer of such
continuous periods began" for "the date of the decedent's
death" in paragraph (1)(C).
(B) Disabled defined
For purposes of subparagraph (A), an individual shall be
disabled if such individual has a mental or physical impairment
which renders him unable to materially participate in the
operation of the farm or other business.
(C) Coordination with recapture
For purposes of subsection (c)(6)(B)(i), if the requirements
of paragraph (1)(C)(ii) are met with respect to any decedent by
reason of subparagraph (A), the period ending on the date on
which the continuous period taken into account under
subparagraph (A) began shall be treated as the period
immediately before the decedent's death.
(5) Special rules for surviving spouses
(A) In general
If property is qualified real property with respect to a
decedent (hereinafter in this paragraph referred to as the
"first decedent") and such property was acquired from or passed
from the first decedent to the surviving spouse of the first
decedent, for purposes of applying this subsection and
subsection (c) in the case of the estate of such surviving
spouse, active management of the farm or other business by the
surviving spouse shall be treated as material participation by
such surviving spouse in the operation of such farm or
business.
(B) Special rule
For the purposes of subparagraph (A), the determination of
whether property is qualified real property with respect to the
first decedent shall be made without regard to subparagraph (D)
of paragraph (1) and without regard to whether an election
under this section was made.
(C) Coordination with paragraph (4)
In any case in which to do so will enable the requirements of
paragraph (1)(C)(ii) to be met with respect to the surviving
spouse, this subsection and subsection (c) shall be applied by
taking into account any application of paragraph (4).
(c) Tax treatment of dispositions and failures to use for qualified
use
(1) Imposition of additional estate tax
If, within 10 years after the decedent's death and before the
death of the qualified heir -
(A) the qualified heir disposes of any interest in qualified
real property (other than by a disposition to a member of his
family), or
(B) the qualified heir ceases to use for the qualified use
the qualified real property which was acquired (or passed) from
the decedent,
then, there is hereby imposed an additional estate tax.
(2) Amount of additional tax
(A) In general
The amount of the additional tax imposed by paragraph (1)
with respect to any interest shall be the amount equal to the
lesser of -
(i) the adjusted tax difference attributable to such
interest, or
(ii) the excess of the amount realized with respect to the
interest (or, in any case other than a sale or exchange at
arm's length, the fair market value of the interest) over the
value of the interest determined under subsection (a).
(B) Adjusted tax difference attributable to interest
For purposes of subparagraph (A), the adjusted tax difference
attributable to an interest is the amount which bears the same
ratio to the adjusted tax difference with respect to the estate
(determined under subparagraph (C)) as -
(i) the excess of the value of such interest for purposes
of this chapter (determined without regard to subsection (a))
over the value of such interest determined under subsection
(a), bears to
(ii) a similar excess determined for all qualified real
property.
(C) Adjusted tax difference with respect to the estate
For purposes of subparagraph (B), the term "adjusted tax
difference with respect to the estate" means the excess of what
would have been the estate tax liability but for subsection (a)
over the estate tax liability. For purposes of this
subparagraph, the term "estate tax liability" means the tax
imposed by section 2001 reduced by the credits allowable
against such tax.
(D) Partial dispositions
For purposes of this paragraph, where the qualified heir
disposes of a portion of the interest acquired by (or passing
to) such heir (or a predecessor qualified heir) or there is a
cessation of use of such a portion -
(i) the value determined under subsection (a) taken into
account under subparagraph (A)(ii) with respect to such
portion shall be its pro rata share of such value of such
interest, and
(ii) the adjusted tax difference attributable to the
interest taken into account with respect to the transaction
involving the second or any succeeding portion shall be
reduced by the amount of the tax imposed by this subsection
with respect to all prior transactions involving portions of
such interest.
(E) Special rule for disposition of timber
In the case of qualified woodland to which an election under
subsection (e)(13)(A) applies, if the qualified heir disposes
of (or severs) any standing timber on such qualified woodland -
(i) such disposition (or severance) shall be treated as a
disposition of a portion of the interest of the qualified
heir in such property, and
(ii) the amount of the additional tax imposed by paragraph
(1) with respect to such disposition shall be an amount equal
to the lesser of -
(I) the amount realized on such disposition (or, in any
case other than a sale or exchange at arm's length, the
fair market value of the portion of the interest disposed
or severed), or
(II) the amount of additional tax determined under this
paragraph (without regard to this subparagraph) if the
entire interest of the qualified heir in the qualified
woodland had been disposed of, less the sum of the amount
of the additional tax imposed with respect to all prior
transactions involving such woodland to which this
subparagraph applied.
For purposes of the preceding sentence, the disposition of a
right to sever shall be treated as the disposition of the
standing timber. The amount of additional tax imposed under
paragraph (1) in any case in which a qualified heir disposes of
his entire interest in the qualified woodland shall be reduced
by any amount determined under this subparagraph with respect
to such woodland.
(3) Only 1 additional tax imposed with respect to any 1 portion
In the case of an interest acquired from (or passing from) any
decedent, if subparagraph (A) or (B) of paragraph (1) applies to
any portion of an interest, subparagraph (B) or (A), as the case
may be, of paragraph (1) shall not apply with respect to the same
portion of such interest.
(4) Due date
The additional tax imposed by this subsection shall become due
and payable on the day which is 6 months after the date of the
disposition or cessation referred to in paragraph (1).
(5) Liability for tax; furnishing of bond
The qualified heir shall be personally liable for the
additional tax imposed by this subsection with respect to his
interest unless the heir has furnished bond which meets the
requirements of subsection (e)(11).
(6) Cessation of qualified use
For purposes of paragraph (1)(B), real property shall cease to
be used for the qualified use if -
(A) such property ceases to be used for the qualified use set
forth in subparagraph (A) or (B) of subsection (b)(2) under
which the property qualified under subsection (b), or
(B) during any period of 8 years ending after the date of the
decedent's death and before the date of the death of the
qualified heir, there had been periods aggregating more than 3
years during which -
(i) in the case of periods during which the property was
held by the decedent, there was no material participation by
the decedent or any member of his family in the operation of
the farm or other business, and
(ii) in the case of periods during which the property was
held by any qualified heir, there was no material
participation by such qualified heir or any member of his
family in the operation of the farm or other business.
(7) Special rules
(A) No tax if use begins within 2 years
If the date on which the qualified heir begins to use the
qualified real property (hereinafter in this subparagraph
referred to as the commencement date) is before the date 2
years after the decedent's death -
(i) no tax shall be imposed under paragraph (1) by reason
of the failure by the qualified heir to so use such property
before the commencement date, and
(ii) the 10-year period under paragraph (1) shall be
extended by the period after the decedent's death and before
the commencement date.
(B) Active management by eligible qualified heir treated as
material participation
For purposes of paragraph (6)(B)(ii), the active management
of a farm or other business by -
(i) an eligible qualified heir, or
(ii) a fiduciary of an eligible qualified heir described in
clause (ii) or (iii) of subparagraph (C),
shall be treated as material participation by such eligible
qualified heir in the operation of such farm or business. In
the case of an eligible qualified heir described in clause
(ii), (iii), or (iv) of subparagraph (C), the preceding
sentence shall apply only during periods during which such heir
meets the requirements of such clause.
(C) Eligible qualified heir
For purposes of this paragraph, the term "eligible qualified
heir" means a qualified heir who -
(i) is the surviving spouse of the decedent,
(ii) has not attained the age of 21,
(iii) is disabled (within the meaning of subsection
(b)(4)(B)), or
(iv) is a student.
(D) Student
For purposes of subparagraph (C), an individual shall be
treated as a student with respect to periods during any
calendar year if (and only if) such individual is a student
(within the meaning of section 151(c)(4)) for such calendar
year.
(E) Certain rents treated as qualified use
For purposes of this subsection, a surviving spouse or lineal
descendant of the decedent shall not be treated as failing to
use qualified real property in a qualified use solely because
such spouse or descendant rents such property to a member of
the family of such spouse or descendant on a net cash basis.
For purposes of the preceding sentence, a legally adopted child
of an individual shall be treated as the child of such
individual by blood.
(8) Qualified conservation contribution is not a disposition
A qualified conservation contribution (as defined in section
170(h)) by gift or otherwise shall not be deemed a disposition
under subsection (c)(1)(A).
(d) Election; agreement
(1) Election
The election under this section shall be made on the return of
the tax imposed by section 2001. Such election shall be made in
such manner as the Secretary shall by regulations prescribe. Such
an election, once made, shall be irrevocable.
(2) Agreement
The agreement referred to in this paragraph is a written
agreement signed by each person in being who has an interest
(whether or not in possession) in any property designated in such
agreement consenting to the application of subsection (c) with
respect to such property.
(3) Modification of election and agreement to be permitted
The Secretary shall prescribe procedures which provide that in
any case in which the executor makes an election under paragraph
(1) (and submits the agreement referred to in paragraph (2))
within the time prescribed therefor, but -
(A) the notice of election, as filed, does not contain all
required information, or
(B) signatures of 1 or more persons required to enter into
the agreement described in paragraph (2) are not included on
the agreement as filed, or the agreement does not contain all
required information,
the executor will have a reasonable period of time (not exceeding
90 days) after notification of such failures to provide such
information or signatures.
(e) Definitions; special rules
For purposes of this section -
(1) Qualified heir
The term "qualified heir" means, with respect to any property,
a member of the decedent's family who acquired such property (or
to whom such property passed) from the decedent. If a qualified
heir disposes of any interest in qualified real property to any
member of his family, such member shall thereafter be treated as
the qualified heir with respect to such interest.
(2) Member of family
The term "member of the family" means, with respect to any
individual, only -
(A) an ancestor of such individual,
(B) the spouse of such individual,
(C) a lineal descendant of such individual, of such
individual's spouse, or of a parent of such individual, or
(D) the spouse of any lineal descendant described in
subparagraph (C).
For purposes of the preceding sentence, a legally adopted child
of an individual shall be treated as the child of such individual
by blood.
(3) Certain real property included
In the case of real property which meets the requirements of
subparagraph (C) of subsection (b)(1), residential buildings and
related improvements on such real property occupied on a regular
basis by the owner or lessee of such real property or by persons
employed by such owner or lessee for the purpose of operating or
maintaining such real property, and roads, buildings, and other
structures and improvements functionally related to the qualified
use shall be treated as real property devoted to the qualified
use.
(4) Farm
The term "farm" includes stock, dairy, poultry, fruit,
furbearing animal, and truck farms, plantations, ranches,
nurseries, ranges, greenhouses or other similar structures used
primarily for the raising of agricultural or horticultural
commodities, and orchards and woodlands.
(5) Farming purposes
The term "farming purposes" means -
(A) cultivating the soil or raising or harvesting any
agricultural or horticultural commodity (including the raising,
shearing, feeding, caring for, training, and management of
animals) on a farm;
(B) handling, drying, packing, grading, or storing on a farm
any agricultural or horticultural commodity in its
unmanufactured state, but only if the owner, tenant, or
operator of the farm regularly produces more than one-half of
the commodity so treated; and
(C)(i) the planting, cultivating, caring for, or cutting of
trees, or
(ii) the preparation (other than milling) of trees for
market.
(6) Material participation
Material participation shall be determined in a manner similar
to the manner used for purposes of paragraph (1) of section
1402(a) (relating to net earnings from self-employment).
(7) Method of valuing farms
(A) In general
Except as provided in subparagraph (B), the value of a farm
for farming purposes shall be determined by dividing -
(i) the excess of the average annual gross cash rental for
comparable land used for farming purposes and located in the
locality of such farm over the average annual State and local
real estate taxes for such comparable land, by
(ii) the average annual effective interest rate for all new
Federal Land Bank loans.
For purposes of the preceding sentence, each average annual
computation shall be made on the basis of the 5 most recent
calendar years ending before the date of the decedent's death.
(B) Value based on net share rental in certain cases
(i) In general
If there is no comparable land from which the average
annual gross cash rental may be determined but there is
comparable land from which the average net share rental may
be determined, subparagraph (A)(i) shall be applied by
substituting "average annual net share rental" for "average
annual gross cash rental".
(ii) Net share rental
For purposes of this paragraph, the term "net share rental"
means the excess of -
(I) the value of the produce received by the lessor of
the land on which such produce is grown, over
(II) the cash operating expenses of growing such produce
which, under the lease, are paid by the lessor.
(C) Exception
The formula provided by subparagraph (A) shall not be used -
(i) where it is established that there is no comparable
land from which the average annual gross cash rental may be
determined, or
(ii) where the executor elects to have the value of the
farm for farming purposes determined and that there is no
comparable land from which the average net share rental may
be determined under paragraph (8).
(8) Method of valuing closely held business interests, etc.
In any case to which paragraph (7)(A) does not apply, the
following factors shall apply in determining the value of any
qualified real property:
(A) The capitalization of income which the property can be
expected to yield for farming or closely held business purposes
over a reasonable period of time under prudent management using
traditional cropping patterns for the area, taking into account
soil capacity, terrain configuration, and similar factors,
(B) The capitalization of the fair rental value of the land
for farm land or closely held business purposes,
(C) Assessed land values in a State which provides a
differential or use value assessment law for farmland or
closely held business,
(D) Comparable sales of other farm or closely held business
land in the same geographical area far enough removed from a
metropolitan or resort area so that nonagricultural use is not
a significant factor in the sales price, and
(E) Any other factor which fairly values the farm or closely
held business value of the property.
(9) Property acquired from decedent
Property shall be considered to have been acquired from or to
have passed from the decedent if -
(A) such property is so considered under section 1014(b)
(relating to basis of property acquired from a decedent),
(B) such property is acquired by any person from the estate,
or
(C) such property is acquired by any person from a trust (to
the extent such property is includible in the gross estate of
the decedent).
(10) Community property
If the decedent and his surviving spouse at any time held
qualified real property as community property, the interest of
the surviving spouse in such property shall be taken into account
under this section to the extent necessary to provide a result
under this section with respect to such property which is
consistent with the result which would have obtained under this
section if such property had not been community property.
(11) Bond in lieu of personal liability
If the qualified heir makes written application to the
Secretary for determination of the maximum amount of the
additional tax which may be imposed by subsection (c) with
respect to the qualified heir's interest, the Secretary (as soon
as possible, and in any event within 1 year after the making of
such application) shall notify the heir of such maximum amount.
The qualified heir, on furnishing a bond in such amount and for
such period as may be required, shall be discharged from personal
liability for any additional tax imposed by subsection (c) and
shall be entitled to a receipt or writing showing such discharge.
(12) Active management
The term "active management" means the making of the management
decisions of a business (other than the daily operating
decisions).
(13) Special rules for woodlands
(A) In general
In the case of any qualified woodland with respect to which
the executor elects to have this subparagraph apply, trees
growing on such woodland shall not be treated as a crop.
(B) Qualified woodland
The term "qualified woodland" means any real property which -
(i) is used in timber operations, and
(ii) is an identifiable area of land such as an acre or
other area for which records are normally maintained in
conducting timber operations.
(C) Timber operations
The term "timber operations" means -
(i) the planting, cultivating, caring for, or cutting of
trees, or
(ii) the preparation (other than milling) of trees for
market.
(D) Election
An election under subparagraph (A) shall be made on the
return of the tax imposed by section 2001. Such election shall
be made in such manner as the Secretary shall by regulations
prescribe. Such an election, once made, shall be irrevocable.
(14) Treatment of replacement property acquired in section 1031
or 1033 transactions
(A) In general
In the case of any qualified replacement property, any period
during which there was ownership, qualified use, or material
participation with respect to the replaced property by the
decedent or any member of his family shall be treated as a
period during which there was such ownership, use, or material
participation (as the case may be) with respect to the
qualified replacement property.
(B) Limitation
Subparagraph (A) shall not apply to the extent that the fair
market value of the qualified replacement property (as of the
date of its acquisition) exceeds the fair market value of the
replaced property (as of the date of its disposition).
(C) Definitions
For purposes of this paragraph -
(i) Qualified replacement property
The term "qualified replacement property" means any real
property which is -
(I) acquired in an exchange which qualifies under section
1031, or
(II) the acquisition of which results in the
nonrecognition of gain under section 1033.
Such term shall only include property which is used for the
same qualified use as the replaced property was being used
before the exchange.
(ii) Replaced property
The term "replaced property" means -
(I) the property transferred in the exchange which
qualifies under section 1031, or
(II) the property compulsorily or involuntarily converted
(within the meaning of section 1033).
(f) Statute of limitations
If qualified real property is disposed of or ceases to be used
for a qualified use, then -
(1) the statutory period for the assessment of any additional
tax under subsection (c) attributable to such disposition or
cessation shall not expire before the expiration of 3 years from
the date the Secretary is notified (in such manner as the
Secretary may by regulations prescribe) of such disposition or
cessation (or if later in the case of an involuntary conversion
or exchange to which subsection (h) or (i) applies, 3 years from
the date the Secretary is notified of the replacement of the
converted property or of an intention not to replace or of the
exchange of property), and
(2) such additional tax may be assessed before the expiration
of such 3-year period notwithstanding the provisions of any other
law or rule of law which would otherwise prevent such assessment.
(g) Application of this section and section 6324B to interests in
partnerships, corporations, and trusts
The Secretary shall prescribe regulations setting forth the
application of this section and section 6324B in the case of an
interest in a partnership, corporation, or trust which, with
respect to the decedent, is an interest in a closely held business
(within the meaning of paragraph (1) of section 6166(b)). For
purposes of the preceding sentence, an interest in a discretionary
trust all the beneficiaries of which are qualified heirs shall be
treated as a present interest.
(h) Special rules for involuntary conversions of qualified real
property
(1) Treatment of converted property
(A) In general
If there is an involuntary conversion of an interest in
qualified real property -
(i) no tax shall be imposed by subsection (c) on such
conversion if the cost of the qualified replacement property
equals or exceeds the amount realized on such conversion, or
(ii) if clause (i) does not apply, the amount of the tax
imposed by subsection (c) on such conversion shall be the
amount determined under subparagraph (B).
(B) Amount of tax where there is not complete reinvestment
The amount determined under this subparagraph with respect to
any involuntary conversion is the amount of the tax which (but
for this subsection) would have been imposed on such conversion
reduced by an amount which -
(i) bears the same ratio to such tax, as
(ii) the cost of the qualified replacement property bears
to the amount realized on the conversion.
(2) Treatment of replacement property
For purposes of subsection (c) -
(A) any qualified replacement property shall be treated in
the same manner as if it were a portion of the interest in
qualified real property which was involuntarily converted;
except that with respect to such qualified replacement property
the 10-year period under paragraph (1) of subsection (c) shall
be extended by any period, beyond the 2-year period referred to
in section 1033(a)(2)(B)(i), during which the qualified heir
was allowed to replace the qualified real property,
(B) any tax imposed by subsection (c) on the involuntary
conversion shall be treated as a tax imposed on a partial
disposition, and
(C) paragraph (6) of subsection (c) shall be applied -
(i) by not taking into account periods after the
involuntary conversion and before the acquisition of the
qualified replacement property, and
(ii) by treating material participation with respect to the
converted property as material participation with respect to
the qualified replacement property.
(3) Definitions and special rules
For purposes of this subsection -
(A) Involuntary conversion
The term "involuntary conversion" means a compulsory or
involuntary conversion within the meaning of section 1033.
(B) Qualified replacement property
The term "qualified replacement property" means -
(i) in the case of an involuntary conversion described in
section 1033(a)(1), any real property into which the
qualified real property is converted, or
(ii) in the case of an involuntary conversion described in
section 1033(a)(2), any real property purchased by the
qualified heir during the period specified in section
1033(a)(2)(B) for purposes of replacing the qualified real
property.
Such term only includes property which is to be used for the
qualified use set forth in subparagraph (A) or (B) of subsection
(b)(2) under which the qualified real property qualified under
subsection (a).
(4) Certain rules made applicable
The rules of the last sentence of section 1033(a)(2)(A) shall
apply for purposes of paragraph (3)(B)(ii).
(i) Exchanges of qualified real property
(1) Treatment of property exchanged
(A) Exchanges solely for qualified exchange property
If an interest in qualified real property is exchanged solely
for an interest in qualified exchange property in a transaction
which qualifies under section 1031, no tax shall be imposed by
subsection (c) by reason of such exchange.
(B) Exchanges where other property received
If an interest in qualified real property is exchanged for an
interest in qualified exchange property and other property in a
transaction which qualifies under section 1031, the amount of
the tax imposed by subsection (c) by reason of such exchange
shall be the amount of tax which (but for this subparagraph)
would have been imposed on such exchange under subsection
(c)(1), reduced by an amount which -
(i) bears the same ratio to such tax, as
(ii) the fair market value of the qualified exchange
property bears to the fair market value of the qualified real
property exchanged.
For purposes of clause (ii) of the preceding sentence, fair
market value shall be determined as of the time of the
exchange.
(2) Treatment of qualified exchange property
For purposes of subsection (c) -
(A) any interest in qualified exchange property shall be
treated in the same manner as if it were a portion of the
interest in qualified real property which was exchanged,
(B) any tax imposed by subsection (c) by reason of the
exchange shall be treated as a tax imposed on a partial
disposition, and
(C) paragraph (6) of subsection (c) shall be applied by
treating material participation with respect to the exchanged
property as material participation with respect to the
qualified exchange property.
(3) Qualified exchange property
For purposes of this subsection, the term "qualified exchange
property" means real property which is to be used for the
qualified use set forth in subparagraph (A) or (B) of subsection
(b)(2) under which the real property exchanged therefor
originally qualified under subsection (a).
-SOURCE-
(Added Pub. L. 94-455, title XX, Sec. 2003(a), Oct. 4, 1976, 90
Stat. 1856; amended Pub. L. 95-472, Sec. 4(a), (c), Oct. 17, 1978,
92 Stat. 1334, 1336; Pub. L. 95-600, title VII, Sec. 702(d)(1),
(2), (4), (5), Nov. 6, 1978, 92 Stat. 2928, 2929; Pub. L. 97-34,
title IV, Sec. 421(a)-(d)(2)(A), (e), (f), (h)-(j)(2)(A), (3), (4),
Aug. 13, 1981, 95 Stat. 306-313; Pub. L. 97-448, title I, Sec.
104(b)(1), (2), Jan. 12, 1983, 96 Stat. 2381; Pub. L. 98-369, div.
A, title X, Sec. 1025(a), July 18, 1984, 98 Stat. 1030; Pub. L.
99-514, title I, Sec. 104(b)(3), Oct. 22, 1986, 100 Stat. 2105;
Pub. L. 100-647, title VI, Sec. 6151(a), Nov. 10, 1988, 102 Stat.
3724; Pub. L. 101-508, title XI, Sec. 11802(f)(5), Nov. 5, 1990,
104 Stat. 1388-530; Pub. L. 105-34, title V, Secs. 501(b), 504(a),
(b), 508(c), title XIII, Sec. 1313(a), Aug. 5, 1997, 111 Stat. 845,
853, 854, 860, 1045.)
-STATAMEND-
ADJUSTMENT OF DECREASE IN VALUE OF QUALIFIED REAL PROPERTY FOR
DECEDENTS DYING IN CALENDAR YEAR 2004
For adjustment of aggregate decrease in value of qualified real
property resulting from election under this section for estates of
decedents dying in calendar year 2004, see section 3.25 of Revenue
Procedure 2003-85, set out as a note under section 1 of this title.
-REFTEXT-
REFERENCES IN TEXT
The Social Security Act, referred to in subsec. (b)(4)(A)(i), is
act Aug. 14, 1935, ch. 531, 49 Stat. 620, as amended. Title II of
the Social Security Act is classified generally to subchapter II
(Sec. 401 et seq.) of chapter 7 of Title 42, The Public Health and
Welfare. For complete classification of this Act to the Code, see
section 1305 of Title 42 and Tables.
-MISC1-
AMENDMENTS
1997 - Subsec. (a)(3). Pub. L. 105-34, Sec. 501(b), added par.
(3).
Subsec. (b)(5)(A). Pub. L. 105-34, Sec. 504(b), struck out at end
"For purposes of subsection (c), such surviving spouse shall not be
treated as failing to use such property in a qualified use solely
because such spouse rents such property to a member of such
spouse's family on a net cash basis."
Subsec. (c)(7)(E). Pub. L. 105-34, Sec. 504(a), added subpar.
(E).
Subsec. (c)(8). Pub. L. 105-34, Sec. 508(c), added par. (8).
Subsec. (d)(3). Pub. L. 105-34, Sec. 1313(a), amended heading and
text of par. (3) generally. Prior to amendment, text read as
follows: "The Secretary shall prescribe procedures which provide
that in any case in which -
"(A) the executor makes an election under paragraph (1) within
the time prescribed for filing such election, and
"(B) substantially complies with the regulations prescribed by
the Secretary with respect to such election, but -
"(i) the notice of election, as filed, does not contain all
required information, or
"(ii) signatures of 1 or more persons required to enter into
the agreement described in paragraph (2) are not included on
the agreement as filed, or the agreement does not contain all
required information,
the executor will have a reasonable period of time (not exceeding
90 days) after notification of such failures to provide such
information or agreements."
1990 - Subsec. (a)(2). Pub. L. 101-508 amended par. (2)
generally, substituting present provisions for provisions which
established graduated increase in applicable limit on aggregate
reduction in fair market value from $600,000 in the case of
decedents dying in 1981 to $750,000 in the case of decedents dying
in 1983 or thereafter.
1988 - Subsec. (b)(5)(A). Pub. L. 100-647 inserted at end "For
purposes of subsection (c), such surviving spouse shall not be
treated as failing to use such property in a qualified use solely
because such spouse rents such property to a member of such
spouse's family on a net cash basis."
1986 - Subsec. (c)(7)(D). Pub. L. 99-514 substituted "section
151(c)(4)" for "section 151(e)(4)".
1984 - Subsec. (d)(3). Pub. L. 98-369 added par. (3).
1983 - Subsec. (b)(5)(C). Pub. L. 97-448, Sec. 104(b)(1), added
subpar. (C).
Subsec. (i)(1)(B)(ii). Pub. L. 97-448, Sec. 104(b)(2)(A),
substituted "the qualified exchange property" for "the other
property".
Subsec. (i)(3). Pub. L. 97-448, Sec. 104(b)(2)(B), substituted
"subparagraph (A) or (B)" for "subparagraph (A), (B), or (C)".
1981 - Subsec. (a)(2). Pub. L. 97-34, Sec. 421(a), substituted
"Limit on aggregate reduction in fair market value" for
"Limitation" in heading "shall not exceed the applicable limit set
forth in the following table:" for "shall not exceed $500,000" in
text, and inserted table.
Subsec. (b)(1). Pub. L. 97-34, Sec. 421(b)(1), substituted
"qualified use by the decedent or a member of the decedent's
family" for "qualified use" in provision preceding subpar. (A), and
in subpars. (A)(i) and (C)(i).
Subsec. (b)(4), (5). Pub. L. 97-34, Sec. 421(b)(2), added pars.
(4) and (5).
Subsec. (c)(1). Pub. L. 97-34, Sec. 421(c)(1)(A), substituted "10
years" for "15 years".
Subsec. (c)(2)(E). Pub. L. 97-34, Sec. 421(h)(2), added subpar.
(E).
Subsec. (c)(3). Pub. L. 97-34, Sec. 421(c)(1)(B)(i), redesignated
par. (4) as (3) and struck out former par. (3), which provided for
a phaseout of additional tax between the 10th and 15th years.
Subsec. (c)(4), (5). Pub. L. 97-34, Sec. 421(c)(1)(B)(i),
redesignated pars. (5) and (6) as (4) and (5), respectively. Former
par. (4) redesignated (3).
Subsec. (c)(6). Pub. L. 97-34, Sec. 421(c)(2)(B)(ii), in subpar.
(B) substituted "more than 3 years" for "3 years or more".
Pub. L. 97-34, Sec. 421(c)(1)(B)(i), redesignated par. (7) as
(6). Former par. (6) redesignated (5).
Subsec. (c)(7). Pub. L. 97-34, Sec. 421(c)(1)(B)(i), (2)(A),
added par. (7). Former par. (7) redesignated (6).
Subsec. (d)(1). Pub. L. 97-34, Sec. 421(j)(3), substituted "The
election under this section shall be made on the return of the tax
imposed by section 2001. Such election shall be made in such manner
as the Secretary shall by regulations prescribe. Such an election,
once made, shall be irrevocable." for "The election under this
section shall be made not later than the time prescribed by section
6075(a) for filing the return of tax imposed by section 2001
(including extensions thereof), and shall be made in such manner as
the Secretary shall by regulations prescribe."
Subsec. (e)(2). Pub. L. 97-34, Sec. 421(i), substituted
provisions designated subpars. (A) through (D) for "such
individual's ancestor or lineal descendant, a lineal descendant of
a grandparent of such individual, the spouse of such individual, or
the spouse of any such descendant".
Subsec. (e)(7). Pub. L. 97-34, Sec. 421(f), added subpar. (B),
redesignated former subpar. (B) as (C), and inserted "and that
there is no comparable land from which the average net share rental
may be determined" after "determined" in subpar. (C), without
specifying whether the language was to be inserted in cl. (i) or
(ii) of subpar. (C). In view of H. Rept. No. 97-201, 97th Cong.,
July 14, 1981, p. 492, the language was inserted in cl. (ii) as the
probable intent of Congress.
Subsec. (e)(9). Pub. L. 97-34, Sec. 421(j)(2)(A), struck out from
subpar. (B) "in satisfaction of the right of such person to a
pecuniary bequest" after "from the estate" and in subpar. (C)
substituted "(to the extent such property is includible in the
gross estate of the decedent)" for "in satisfaction of a right
(which such person has by reason of the death of the decedent) to
receive from the trust a specific dollar amount which is the
equivalent of a pecuniary bequest".
Subsec. (e)(12). Pub. L. 97-34, Sec. 421(c)(2)(B)(i), added par.
(12).
Subsec. (e)(13), (14). Pub. L. 97-34, Sec. 421(h)(1), (j)(4),
added pars. (13) and (14).
Subsec. (f)(1). Pub. L. 97-34, Sec. 421(e)(2), substituted "to
which subsection (h)" for "to which an election under subsection
(h)".
Pub. L. 97-34, Sec. 421(d)(2)(A), substituted "conversion or
exchange", "(h) or (i)", and "replace or of the exchange of
property" for "conversion", "(h)", and "replace".
Subsec. (g). Pub. L. 97-34, Sec. 421(j)(1), inserted provision
that for purposes of the preceding sentence, an interest in a
discretionary trust all the beneficiaries of which are qualified
heirs shall be treated as a present interest.
Subsec. (h)(1)(A). Pub. L. 97-34, Sec. 421(e)(1)(A), struck out
"and the qualified heir makes an election under this subsection"
after "qualified real property".
Subsec. (h)(2)(A). Pub. L. 97-34, Sec. 421(c)(1)(B)(ii),
substituted "; except that" for ", except that" and "the 10-year
period" for "the 15-year period", deleted cl. (i) designation, and
struck out cl. (ii), which provided the phaseout period under par.
(3) of subsec. (c) be appropriately adjusted to take into account
the extension referred to in cl. (i).
Subsec. (h)(2)(C). Pub. L. 97-34, Sec. 421(c)(1)(B)(iii),
substituted "(6)" for "(7)" in provisions preceding cl. (i).
Subsec. (h)(5). Pub. L. 97-34, Sec. 421(e)(1)(B), struck out par.
(5) which provided for making a subsec. (h) election at such time
and in such manner as the Secretary may by regulations prescribe.
Subsec. (i). Pub. L. 97-34, Sec. 421(d)(1), added subsec. (i).
1978 - Subsec. (b)(1). Pub. L. 95-600, Sec. 702(d)(1), inserted
"which was acquired from or passed from the decedent to a qualified
heir of the decedent and" after "located in the United States".
Subsec. (c)(6). Pub. L. 95-600, Sec. 702(d)(5)(A), inserted
"unless the heir has furnished bond which meets the requirements of
subsection (e)(11)" after "respect to his interest".
Subsec. (e)(9). Pub. L. 95-600, Sec. 702(d)(2), added par. (9).
Subsec. (e)(10). Pub. L. 95-600, Sec. 702(d)(4), added par. (10).
Subsec. (e)(11). Pub. L. 95-600, Sec. 702(d)(5)(B), added par.
(11).
Subsec. (f)(1). Pub. L. 95-472, Sec. 4(c), inserted provision
relating to the expiration of the statutory period for the
assessment of additional tax due under subsec. (c) in the case of
an involuntary conversion to which an election under subsec. (h) is
applicable.
Subsec. (h). Pub. L. 95-472, Sec. 4(a), added subsec. (h).
EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by section 501(b) of Pub. L. 105-34 applicable to
estates of decedents dying, and gifts made, after Dec. 31, 1997,
see section 501(f) of Pub. L. 105-34, set out as a note under
section 2001 of this title.
Section 504(c) of Pub. L. 105-34 provided that: "The amendments
made by this section [amending this section] shall apply with
respect to leases entered into after December 31, 1976."
Amendment by section 508(c) of Pub. L. 105-34 applicable to
easements granted after Dec. 31, 1997, see section 508(e)(2) of
Pub. L. 105-34, set out as a note under section 170 of this title.
Section 1313(b) of Pub. L. 105-34 provided that: "The amendment
made by subsection (a) [amending this section] shall apply to the
estates of decedents dying after the date of the enactment of this
Act [Aug. 5, 1997]."
EFFECTIVE DATE OF 1988 AMENDMENT
Section 6151(b) of Pub. L. 100-647 provided that:
"(1) In general. - The amendment made by subsection (a) [amending
this section] shall apply with respect to rentals occurring after
December 31, 1976.
"(2) Waiver of statute of limitations. - If on the date of the
enactment of this Act [Nov. 10, 1988] (or at any time within 1 year
after such date of enactment) refund or credit of any overpayment
of tax resulting from the application of the amendment made by
subsection (a) is barred by any law or rule of law, refund or
credit of such overpayment shall, nevertheless, be made or allowed
if claim therefore is filed before the date 1 year after the date
of the enactment of this Act."
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by Pub. L. 99-514 applicable to taxable years beginning
after Dec. 31, 1986, see section 151(a) of Pub. L. 99-514, set out
as a note under section 1 of this title.
EFFECTIVE DATE OF 1984 AMENDMENT
Section 1025(b) of Pub. L. 98-369, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
"(1) In general. - The amendment made by this section [amending
this section] shall apply to estates of decedents dying after
December 31, 1976.
"(2) Refund or credit of overpayment barred by statute of
limitations. - Notwithstanding section 6511(a) of the Internal
Revenue Code of 1986 [formerly I.R.C. 1954] or any other period of
limitation or lapse of time, a claim for credit or refund of
overpayment of the tax imposed by such Code which arises by reason
of this section may be filed by any person at any time within the
1-year period beginning on the date of the enactment of this Act
[July 18, 1984]. Sections 6511(b) and 6514 of such Code shall not
apply to any claim for credit or refund filed under this subsection
within such 1-year period."
EFFECTIVE DATE OF 1983 AMENDMENT
Amendment by Pub. L. 97-448 effective, except as otherwise
provided, as if it had been included in the provision of the
Economic Recovery Tax Act of 1981, Pub. L. 97-34, to which such
amendment relates, see section 109 of Pub. L. 97-448, set out as a
note under section 1 of this title.
EFFECTIVE DATE OF 1981 AMENDMENT
Section 421(k) of Pub. L. 97-34, as amended by Pub. L. 97-448,
title I, Sec. 104(b)(4), Jan. 12, 1983, 96 Stat. 2382; Pub. L.
99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
"(1) In general. - Except as otherwise provided in this
subsection, the amendments made by this section [amending this
section and sections 1016, 1040, and 6324B of this title] shall
apply with respect to the estates of decedents dying after December
31, 1981.
"(2) Increase in limitation. - The amendment made by subsection
(a) [amending this section] shall apply with respect to the estates
of decedents dying after December 31, 1980.
"(3) Subsection (d). - The amendments made by subsection (d)
[amending this section and section 6324B of this title] shall apply
with respect to exchanges after December 31, 1981.
"(4) Subsection (e). - The amendments made by subsection (e)
[amending this section] shall apply with respect to involuntary
conversions after December 31, 1981.
"(5) Certain amendments made retroactive to 1976. -
"(A) In general. - The amendments made by subsections (b)(1),
(j)(1), and (j)(2) [amending this section and section 1040 of
this title] and the provisions of subparagraph (A) of section
2032A(c)(7) of the Internal Revenue Code of 1986 [formerly I.R.C.
1954] (as added by subsection (c)(2)) shall apply with respect to
the estates of decedents dying after December 31, 1976.
"(B) Timely election required. - Subparagraph (A) shall only
apply in the case of an estate if a timely election under section
2032A was made with respect to such estate. If the estate of any
decedent would not qualify under section 2032A of the Internal
Revenue Code of 1986 but for the amendments described in
subparagraph (A) and the time for making an election under
section 2032A with respect to such estate would (but for this
sentence) expire after July 28, 1980, the time for making such
election shall not expire before the close of February 16, 1982.
"(C) Reinstatement of elections. - If any election under
section 2032A was revoked before the date of the enactment of
this Act [Aug. 13, 1981], such election may be reinstated at any
time before February 17, 1982.
"(D) Statute of limitations. - If on the date of the enactment
of this Act [Aug. 13, 1981] (or at any time before February 17,
1982) the making of a credit or refund of any overpayment of tax
resulting from the amendments described in subparagraph (A) is
barred by any law or rule of law, such credit or refund shall
nevertheless be made if claim therefor is made before February
17, 1982."
EFFECTIVE DATE OF 1978 AMENDMENTS
Section 702(d)(6) of Pub. L. 95-600 provided that: "The
amendments made by this subsection [amending this section and
section 1040 of this title] shall apply to the estates of decedents
dying after December 31, 1976."
Amendment of section by Pub. L. 95-472 applicable with respect to
involuntary conversions after Dec. 31, 1976, see section 4(d) of
Pub. L. 95-472, set out as a note under section 1016 of this title.
EFFECTIVE DATE
Section 2003(e) of Pub. L. 94-455 provided that: "The amendments
made by this section [enacting this section and section 6324B of
this title and amending section 2013 of this title] shall apply to
the estates of decedents dying after December 31, 1976."
SAVINGS PROVISION
For provisions that nothing in amendment by Pub. L. 101-508 be
construed to affect treatment of certain transactions occurring,
property acquired, or items of income, loss, deduction, or credit
taken into account prior to Nov. 5, 1990, for purposes of
determining liability for tax for periods ending after Nov. 5,
1990, see section 11821(b) of Pub. L. 101-508, set out as a note
under section 29 of this title.
WAIVER OF STATUTE OF LIMITATION FOR TAXES ON CERTAIN FARM
VALUATIONS
Pub. L. 107-16, title V, Sec. 581, June 7, 2001, 115 Stat. 93,
provided that: "If on the date of the enactment of this Act [June
7, 2001] (or at any time within 1 year after the date of the
enactment) a refund or credit of any overpayment of tax resulting
from the application of section 2032A(c)(7)(E) of the Internal
Revenue Code of 1986 is barred by any law or rule of law, the
refund or credit of such overpayment shall, nevertheless, be made
or allowed if claim therefor is filed before the date 1 year after
the date of the enactment of this Act."
INFORMATION NECESSARY FOR VALID SPECIAL USE VALUATION ELECTION
Section 1421 of Pub. L. 99-514, as amended by Pub. L. 100-647,
title I, Sec. 1014(f), Nov. 10, 1988, 102 Stat. 3562, provided
that:
"(a) In General. - In the case of any decedent dying before
January 1, 1986, if the executor -
"(1) made an election under section 2032A of the Internal
Revenue Code of 1954 [now 1986] on the return of tax imposed by
section 2001 of such Code, and
"(2) provided substantially all the information with respect to
such election required on such return of tax,
such election shall be a valid election for purposes of section
2032A of such Code.
"(b) Executor Must Provide Information. - An election described
in subsection (a) shall not be valid if the Secretary of the
Treasury or his delegate after the date of the enactment of this
Act [Oct. 22, 1986] requests information from the executor with
respect to such election and the executor does not provide such
information within 90 days of receipt of such request.
"(c) Effective Date. - The provisions of this section shall not
apply to the estate of any decedent if before the date of the
enactment of this Act [Oct. 22, 1986] the statute of limitations
has expired with respect to -
"(1) the return of tax imposed by section 2001 of the Internal
Revenue Code of 1954 [now 1986], and
"(2) the period during which a claim for credit or refund may
be timely filed.
"(d) Special Rule for Certain Estate. - Notwithstanding
subsection (a)(2), the provisions of this section shall apply to
the estate of an individual who died on January 30, 1984, and with
respect to which -
"(1) a Federal estate tax return was filed on October 30, 1984,
electing current use valuation, and
"(2) the agreement required under section 2032A was filed on
November 9, 1984."
LAND DIVERTED UNDER 1983 PAYMENT-IN-KIND PROGRAM
Land diverted from production of agricultural commodities under a
1983 payment-in-kind program to be treated, for purposes of this
section, as used during the 1983 crop year by qualified taxpayers
in the active conduct of the trade or business of farming, with
qualified taxpayers who materially participate in the diversion and
devotion to conservation uses under a 1983 payment-in-kind program
to be treated as materially participating in the operation of such
land during the 1983 crop year, see section 3 of Pub. L. 98-4, set
out as a note under section 61 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 263A, 453, 453A, 469,
664, 1014, 1016, 1040, 1223, 1396, 1397C, 2013, 2031, 2035, 2056A,
2057, 2624, 2663, 6324B of this title.
-End-
-CITE-
26 USC Sec. 2033 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
Sec. 2033. Property in which the decedent had an interest
-STATUTE-
The value of the gross estate shall include the value of all
property to the extent of the interest therein of the decedent at
the time of his death.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 381; Pub. L. 87-834, Sec.
18(a)(2)(A), Oct. 16, 1962, 76 Stat. 1052.)
-MISC1-
AMENDMENTS
1962 - Pub. L. 87-834 struck out provisions which excepted real
property situated outside of the United States.
EFFECTIVE DATE OF 1962 AMENDMENT
Amendment by Pub. L. 87-834 applicable to estates of decedents
dying after Oct. 16, 1962, except as otherwise provided, see
section 18(b) of Pub. L. 87-834, set out as a note under section
2031 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in section 2056 of this title; title
43 section 1620.
-End-
-CITE-
26 USC Sec. 2033A 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
[Sec. 2033A. Renumbered Sec. 2057]
-STATUTE-
-End-
-CITE-
26 USC Sec. 2034 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
Sec. 2034. Dower or curtesy interests
-STATUTE-
The value of the gross estate shall include the value of all
property to the extent of any interest therein of the surviving
spouse, existing at the time of the decedent's death as dower or
curtesy, or by virtue of a statute creating an estate in lieu of
dower or curtesy.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 381; Pub. L. 87-834, Sec.
18(a)(2)(B), Oct. 16, 1962, 76 Stat. 1052.)
-MISC1-
AMENDMENTS
1962 - Pub. L. 87-834 struck out provisions which excepted real
property situated outside of the United States.
EFFECTIVE DATE OF 1962 AMENDMENT
Amendment by Pub. L. 87-834 applicable to estates of decedents
dying after Oct. 16, 1962, except as otherwise provided, see
section 18(b) of Pub. L. 87-834, set out as a note under section
2031 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2045, 6324 of this title.
-End-
-CITE-
26 USC Sec. 2035 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
Sec. 2035. Adjustments for certain gifts made within 3 years of
decedent's death
-STATUTE-
(a) Inclusion of certain property in gross estate
If -
(1) the decedent made a transfer (by trust or otherwise) of an
interest in any property, or relinquished a power with respect to
any property, during the 3-year period ending on the date of the
decedent's death, and
(2) the value of such property (or an interest therein) would
have been included in the decedent's gross estate under section
2036, 2037, 2038, or 2042 if such transferred interest or
relinquished power had been retained by the decedent on the date
of his death,
the value of the gross estate shall include the value of any
property (or interest therein) which would have been so included.
(b) Inclusion of gift tax on gifts made during 3 years before
decedent's death
The amount of the gross estate (determined without regard to this
subsection) shall be increased by the amount of any tax paid under
chapter 12 by the decedent or his estate on any gift made by the
decedent or his spouse during the 3-year period ending on the date
of the decedent's death.
(c) Other rules relating to transfers within 3 years of death
(1) In general
For purposes of -
(A) section 303(b) (relating to distributions in redemption
of stock to pay death taxes),
(B) section 2032A (relating to special valuation of certain
farms, etc., real property), and
(C) subchapter C of chapter 64 (relating to lien for taxes),
the value of the gross estate shall include the value of all
property to the extent of any interest therein of which the
decedent has at any time made a transfer, by trust or otherwise,
during the 3-year period ending on the date of the decedent's
death.
(2) Coordination with section 6166
An estate shall be treated as meeting the 35 percent of
adjusted gross estate requirement of section 6166(a)(1) only if
the estate meets such requirement both with and without the
application of subsection (a).
(3) Marital and small transfers
Paragraph (1) shall not apply to any transfer (other than a
transfer with respect to a life insurance policy) made during a
calendar year to any donee if the decedent was not required by
section 6019 (other than by reason of section 6019(2)) to file
any gift tax return for such year with respect to transfers to
such donee.
(d) Exception
Subsection (a) and paragraph (1) of subsection (c) shall not
apply to any bona fide sale for an adequate and full consideration
in money or money's worth.
(e) Treatment of certain transfers from revocable trusts
For purposes of this section and section 2038, any transfer from
any portion of a trust during any period that such portion was
treated under section 676 as owned by the decedent by reason of a
power in the grantor (determined without regard to section 672(e))
shall be treated as a transfer made directly by the decedent.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 381; Pub. L. 87-834, Sec.
18(a)(2)(C), Oct. 16, 1962, 76 Stat. 1052; Pub. L. 94-455, title
XX, Sec. 2001(a)(5), Oct. 4, 1976, 90 Stat. 1848; Pub. L. 95-600,
title VII, Sec. 702(f)(1), Nov. 6, 1978, 92 Stat. 2930; Pub. L.
97-34, title IV, Secs. 403(b)(3)(B), 424(a), Aug. 13, 1981, 95
Stat. 301, 317; Pub. L. 97-448, title I, Sec. 104(a)(9), (d)(1)(A),
(C), (2), Jan. 12, 1983, 96 Stat. 2381, 2383; Pub. L. 105-34, title
XIII, Sec. 1310(a), Aug. 5, 1997, 111 Stat. 1043; Pub. L. 106-554,
Sec. 1(a)(7) [title III, Sec. 319(14)], Dec. 21, 2000, 114 Stat.
2763, 2763A-646.)
-MISC1-
AMENDMENTS
2000 - Subsec. (c)(2). Pub. L. 106-554, Sec. 1(a)(7) [title III,
Sec. 319(14)(A)], substituted "subsection (a)" for "paragraph (1)".
Subsec. (d). Pub. L. 106-554, Sec. 1(a)(7) [title III, Sec.
319(14)(B)], inserted "and paragraph (1) of subsection (c)" after
"Subsection (a)".
1997 - Pub. L. 105-34 amended section catchline and text
generally. Prior to amendment, section consisted of subsecs. (a) to
(d) relating to adjustments for gifts made within 3 years of
decedent's death.
1983 - Subsec. (b)(2). Pub. L. 97-448, Sec. 104(a)(9),
substituted "section 6019(2)" for "section 6019(a)(2)".
Subsec. (d)(2). Pub. L. 97-448, Sec. 104(d)(2), inserted "of this
subsection and paragraph (2) of subsection (b)" after "Paragraph
(1)", and struck out "2041," after "2038,".
Subsec. (d)(3)(C), (D). Pub. L. 97-448, Sec. 104(d)(1)(C),
redesignated subpar. (D) as (C). Former subpar. (C), which referred
to section 6166 (relating to extension of time for payment of
estate tax where estate consists largely of interest in closely
held business), was struck out.
Subsec. (d)(4). Pub. L. 97-448, Sec. 104(d)(1)(A), added par.
(4).
1981 - Subsec. (b)(2). Pub. L. 97-34, Sec. 403(b)(3)(B), inserted
"(other than by reason of section 6019(a)(2))" after "section
6019".
Subsec. (d). Pub. L. 97-34, Sec. 424(a), added subsec. (d).
1978 - Subsec. (b). Pub. L. 95-600 substituted in par. (2)
provisions relating to gifts for which donee was not required by
section 6019 to file gift tax returns for provisions relating to
gifts excludable in computing taxable gifts by reason of section
2503(b) and inserted provisions following par. (2) relating to
inapplicability of par. (2) to transfers respecting life insurance
policies.
1976 - Pub. L. 94-455 substituted provisions covering adjustments
for gifts made within 3 years of decedent's death for provisions
under which transfers by the decedent within 3 years of the
decedent's death were deemed to have been made in contemplation of
death and included in the value of the gross estate.
1962 - Subsec. (a). Pub. L. 87-834 struck out provisions which
excepted real property situated outside of the United States.
EFFECTIVE DATE OF 1997 AMENDMENT
Section 1310(c) of Pub. L. 105-34 provided that: "The amendments
made by this section [amending this section] shall apply to the
estates of decedents dying after the date of the enactment of this
Act [Aug. 5, 1997]."
EFFECTIVE DATE OF 1983 AMENDMENT
Amendment by Pub. L. 97-448 effective, except as otherwise
provided, as if it had been included in the provision of the
Economic Recovery Tax Act of 1981, Pub. L. 97-34, to which such
amendment relates, see section 109 of Pub. L. 97-448, set out as a
note under section 1 of this title.
EFFECTIVE DATE OF 1981 AMENDMENT
Amendment by section 403(b)(3)(B) of Pub. L. 97-34 applicable to
estates of decedents dying after Dec. 31, 1981, see section 403(e)
of Pub. L. 97-34, set out as a note under section 2056 of this
title.
Section 424(b) of Pub. L. 97-34 provided that: "The amendment
made by subsection (a) [amending this section] shall apply to the
estates of decedents dying after December 31, 1981."
EFFECTIVE DATE OF 1978 AMENDMENT
Section 702(f)(2) of Pub. L. 95-600 provided that: "The amendment
made by paragraph (1) [amending this section] shall apply to the
estates of decedents dying after December 31, 1976, except that it
shall not apply to transfers made before January 1, 1977."
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by Pub. L. 94-455 applicable to estates of decedents
dying after Dec. 31, 1976, but not to transfers made before Jan. 1,
1977, see section 2001(d)(1) of Pub. L. 94-455, set out as a note
under section 2001 of this title.
EFFECTIVE DATE OF 1962 AMENDMENT
Amendment by Pub. L. 87-834 applicable to estates of decedents
dying after Oct. 16, 1962, except as otherwise provided, see
section 18(b) of Pub. L. 87-834, set out as a note under section
2031 of this title.
TRANSFERS MADE BY DECEDENT DURING 1977; ELECTION AVAILABLE TO
EXECUTOR ON OR BEFORE DUE DATE FOR FILING ESTATE TAX RETURN
Pub. L. 96-222, title I, Sec. 107(a)(2)(F), Apr. 1, 1980, 94
Stat. 223, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100
Stat. 2095, provided that:
"(i) If the executor elects the benefits of this subparagraph
with respect to any estate, section 2035(b) of the Internal
Revenue Code of 1986 [formerly I.R.C. 1954] (relating to
adjustments for gifts made within 3 years of decedent's death)
shall be applied with respect to transfers made by the decedent
during 1977 as if paragraph (2) of such section 2035(b) read as
follows:
" '(2) to any gift to a donee made during 1977 to the extent of
the amount of such gift which was excludable in computing taxable
gifts by reason of section 2503(b) (relating to $3,000 annual
exclusion for purposes of the gift tax) determined without regard
to section 2513(a).'
"(ii) The election under clause (i) with respect to any estate
shall be made on or before the later of -
"(I) the due date for filing the estate tax return, or
"(II) the day which is 120 days after the date of the
enactment of this Act [Apr. 1, 1980]."
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2001, 2036, 2041, 2043,
2045, 2056, 2104, 2107, 2642, 6166, 6324 of this title.
-End-
-CITE-
26 USC Sec. 2036 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
Sec. 2036. Transfers with retained life estate
-STATUTE-
(a) General rule
The value of the gross estate shall include the value of all
property to the extent of any interest therein of which the
decedent has at any time made a transfer (except in case of a bona
fide sale for an adequate and full consideration in money or
money's worth), by trust or otherwise, under which he has retained
for his life or for any period not ascertainable without reference
to his death or for any period which does not in fact end before
his death -
(1) the possession or enjoyment of, or the right to the income
from, the property, or
(2) the right, either alone or in conjunction with any person,
to designate the persons who shall possess or enjoy the property
or the income therefrom.
(b) Voting rights
(1) In general
For purposes of subsection (a)(1), the retention of the right
to vote (directly or indirectly) shares of stock of a controlled
corporation shall be considered to be a retention of the
enjoyment of transferred property.
(2) Controlled corporation
For purposes of paragraph (1), a corporation shall be treated
as a controlled corporation if, at any time after the transfer of
the property and during the 3-year period ending on the date of
the decedent's death, the decedent owned (with the application of
section 318), or had the right (either alone or in conjunction
with any person) to vote, stock possessing at least 20 percent of
the total combined voting power of all classes of stock.
(3) Coordination with section 2035
For purposes of applying section 2035 with respect to paragraph
(1), the relinquishment or cessation of voting rights shall be
treated as a transfer of property made by the decedent.
(c) Limitation on application of general rule
This section shall not apply to a transfer made before March 4,
1931; nor to a transfer made after March 3, 1931, and before June
7, 1932, unless the property transferred would have been includible
in the decedent's gross estate by reason of the amendatory language
of the joint resolution of March 3, 1931 (46 Stat. 1516).
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 382; Pub. L. 87-834, Sec.
18(a)(2)(D), Oct. 16, 1962, 76 Stat. 1052; Pub. L. 94-455, title
XX, Sec. 2009(a), Oct. 4, 1976, 90 Stat. 1893; Pub. L. 95-600,
title VII, Sec. 702(i)(1), (2), Nov. 6, 1978, 92 Stat. 2931; Pub.
L. 100-203, title X, Sec. 10402(a), Dec. 22, 1987, 101 Stat.
1330-431; Pub. L. 100-647, title III, Sec. 3031(a)(1), (b)-(e),
(g), Nov. 10, 1988, 102 Stat. 3634-3638; Pub. L. 101-508, title XI,
Sec. 11601(a), Nov. 5, 1990, 104 Stat. 1388-490.)
-MISC1-
AMENDMENTS
1990 - Subsecs. (c), (d). Pub. L. 101-508 redesignated subsec.
(d) as (c) and struck out former subsec. (c) which enunciated a
rule that retention of retained interest would be considered to be
a retention of enjoyment of transferred property if a person held a
substantial interest in an enterprise, and such person in effect
transferred after Dec. 17, 1987, property having a
disproportionately large share of the potential appreciation in
such person's interest in the enterprise while retaining an
interest in the income of, or rights in, the enterprise.
1988 - Subsec. (c)(1)(B). Pub. L. 100-647, Sec. 3031(e),
substituted "an interest" for "a disproportionately large share"
after "whole retaining".
Subsec. (c)(2). Pub. L. 100-647, Sec. 3031(g)(1), substituted
"consideration furnished by" for "sales to" in heading, and amended
text generally. Prior to amendment, text read as follows: "The
exception contained in subsection (a) for a bona fide sale shall
not apply to a transfer described in paragraph (1) if such transfer
is to a member of the transferor's family."
Subsec. (c)(3)(C). Pub. L. 100-647, Sec. 3031(d), substituted
"Except as provided in regulations, an" for "An".
Subsec. (c)(4). Pub. L. 100-647, Sec. 3031(a)(1), amended par.
(4) generally, substituting provisions relating to treatment of
certain transfers for provisions relating to coordination with
section 2035.
Subsec. (c)(5). Pub. L. 100-647, Sec. 3031(g)(2), amended par.
(5) generally, substituting provisions relating to the making of
appropriate adjustments in amounts included in gross estate for
provisions relating to coordination with section 2043.
Subsec. (c)(6). Pub. L. 100-647, Sec. 3031(b), added par. (6).
Subsec. (c)(7), (8). Pub. L. 100-647, Sec. 3031(b)[(c)], added
pars. (7) and (8).
1987 - Subsecs. (c), (d). Pub. L. 100-203 added subsec. (c) and
redesignated former subsec. (c) as (d).
1978 - Subsec. (a). Pub. L. 95-600, Sec. 702(i)(2), struck out
provision following par. (2) relating to the retention of voting
rights in retained stock.
Subsecs. (b), (c). Pub. L. 95-600, Sec. 702(i)(1), added subsec.
(b) and redesignated former subsec. (b) as (c).
1976 - Subsec. (a). Pub. L. 94-455 provided that, for purposes of
par. (1), the retention of voting rights in retained stock be
considered to be a retention of the enjoyment of that stock.
1962 - Subsec. (a). Pub. L. 87-834 struck out provisions which
excepted real property situated outside of the United States.
EFFECTIVE DATE OF 1990 AMENDMENT
Section 11601(c) of Pub. L. 101-508 provided that: "The
amendments made by this section [amending this section and sections
2207B and 2501 of this title] shall apply in the case of property
transferred after December 17, 1987."
EFFECTIVE DATE OF 1988 AMENDMENT
Section 3031(h) of Pub. L. 100-647 provided that:
"(1) In general. - Except as provided in this subsection, any
amendment made by this section [enacting section 2207B of this
title and amending this section and section 2501 of this title]
shall take effect as if included in the provisions of the Revenue
Act of 1987 [Pub. L. 100-203, title X] to which such amendment
relates.
"(2) Subsection (a). - The amendments made by subsection (a)
[amending this section and section 2501 of this title] shall apply
in cases where the transfer referred to in section 2036(c)(1)(B) of
the 1986 Code is on or after June 21, 1988.
"(3) Subsection (f). - If an amount is included in the gross
estate of a decedent under section 2036 of the 1986 Code other than
solely by reason of section 2036(c) of the 1986 Code, the
amendments made by subsection (f) [enacting section 2207B of this
title] shall apply to such amount only with respect to property
transferred after the date of the enactment of this Act [Nov. 10,
1988].
"(4) Correction period. - If section 2036(c)(1) of the 1986 Code
would (but for this paragraph) apply to any interest arising from a
transaction entered into during the period beginning after December
17, 1987, and ending before January 1, 1990, such section shall not
apply to such interest if -
"(A) during such period, such actions are taken as are
necessary to have such section 2036(c)(1) not apply to such
transaction (and any such interest), or
"(B) the original transferor and his spouse on January 1, 1990
(or, if earlier, the date of the original transferor's death),
does not hold any interest in the enterprise involved.
"(5) Clarification of effective date. - For purposes of section
10402(b) of the Revenue Act of 1987 [Pub. L. 100-203, set out as an
Effective Date of 1987 Amendment note below], with respect to
property transferred on or before December 17, 1987 -
"(A) any failure to exercise a right of conversion,
"(B) any failure to pay dividends, and
"(c) [sic] failures to exercise other rights specified in
regulations,
shall not be treated as a subsequent transfer."
EFFECTIVE DATE OF 1987 AMENDMENT
Section 10402(b) of Pub. L. 100-203 provided that: "The amendment
made by subsection (a) [amending this section] shall apply with
respect to estates of decedents dying after December 31, 1987, but
only in the case of property transferred after December 17, 1987."
[For clarification of this note, see section 3031(h)(5) of Pub. L.
100-647, set out as an Effective Date of 1988 Amendment note
above.]
EFFECTIVE DATE OF 1978 AMENDMENT
Section 702(i)(3) of Pub. L. 95-600 provided that: "The
amendments made by this subsection [amending this section] shall
apply to transfers made after June 22, 1976."
EFFECTIVE DATE OF 1976 AMENDMENT
Section 2009(e)(1) of Pub. L. 94-455 provided that: "The
amendment made by subsection (a) [amending this section] shall
apply to transfers made after June 22, 1976."
EFFECTIVE DATE OF 1962 AMENDMENT
Amendment by Pub. L. 87-834 applicable to estates of decedents
dying after Oct. 16, 1962, except as otherwise provided, see
section 18(b) of Pub. L. 87-834, set out as a note under section
2031 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2035, 2041, 2043, 2045,
2104, 2107, 2207B, 2501, 6324 of this title.
-End-
-CITE-
26 USC Sec. 2037 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
Sec. 2037. Transfers taking effect at death
-STATUTE-
(a) General rule
The value of the gross estate shall include the value of all
property to the extent of any interest therein of which the
decedent has at any time after September 7, 1916, made a transfer
(except in case of a bona fide sale for an adequate and full
consideration in money or money's worth), by trust or otherwise, if
-
(1) possession or enjoyment of the property can, through
ownership of such interest, be obtained only by surviving the
decedent, and
(2) the decedent has retained a reversionary interest in the
property (but in the case of a transfer made before October 8,
1949, only if such reversionary interest arose by the express
terms of the instrument of transfer), and the value of such
reversionary interest immediately before the death of the
decedent exceeds 5 percent of the value of such property.
(b) Special rules
For purposes of this section, the term "reversionary interest"
includes a possibility that property transferred by the decedent -
(1) may return to him or his estate, or
(2) may be subject to a power of disposition by him,
but such term does not include a possibility that the income alone
from such property may return to him or become subject to a power
of disposition by him. The value of a reversionary interest
immediately before the death of the decedent shall be determined
(without regard to the fact of the decedent's death) by usual
methods of valuation, including the use of tables of mortality and
actuarial principles, under regulations prescribed by the
Secretary. In determining the value of a possibility that property
may be subject to a power of disposition by the decedent, such
possibility shall be valued as if it were a possibility that such
property may return to the decedent or his estate. Notwithstanding
the foregoing, an interest so transferred shall not be included in
the decedent's gross estate under this section if possession or
enjoyment of the property could have been obtained by any
beneficiary during the decedent's life through the exercise of a
general power of appointment (as defined in section 2041) which in
fact was exercisable immediately before the decedent's death.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 382; Pub. L. 87-834, Sec.
18(a)(2)(E), Oct. 16, 1962, 76 Stat. 1052; Pub. L. 94-455, title
XIX, Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)
-MISC1-
AMENDMENTS
1976 - Subsec. (b). Pub. L. 94-455 struck out "or his delegate"
after "Secretary".
1962 - Subsec. (a). Pub. L. 87-834 struck out provisions which
excepted real property situated outside of the United States.
EFFECTIVE DATE OF 1962 AMENDMENT
Amendment by Pub. L. 87-834 applicable to estates of decedents
dying after Oct. 16, 1962, except as otherwise provided, see
section 18(b) of Pub. L. 87-834, set out as a note under section
2031 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2035, 2041, 2043, 2045,
2104, 2107, 6324 of this title.
-End-
-CITE-
26 USC Sec. 2038 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
Sec. 2038. Revocable transfers
-STATUTE-
(a) In general
The value of the gross estate shall include the value of all
property -
(1) Transfers after June 22, 1936
To the extent of any interest therein of which the decedent has
at any time made a transfer (except in case of a bona fide sale
for an adequate and full consideration in money or money's
worth), by trust or otherwise, where the enjoyment thereof was
subject at the date of his death to any change through the
exercise of a power (in whatever capacity exercisable) by the
decedent alone or by the decedent in conjunction with any other
person (without regard to when or from what source the decedent
acquired such power), to alter, amend, revoke, or terminate, or
where any such power is relinquished during the 3 year period
ending on the date of the decedent's death.
(2) Transfers on or before June 22, 1936
To the extent of any interest therein of which the decedent has
at any time made a transfer (except in case of a bona fide sale
for an adequate and full consideration in money or money's
worth), by trust or otherwise, where the enjoyment thereof was
subject at the date of his death to any change through the
exercise of a power, either by the decedent alone or in
conjunction with any person, to alter, amend, or revoke, or where
the decedent relinquished any such power during the 3 year period
ending on the date of the decedent's death. Except in the case of
transfers made after June 22, 1936, no interest of the decedent
of which he has made a transfer shall be included in the gross
estate under paragraph (1) unless it is includible under this
paragraph.
(b) Date of existence of power
For purposes of this section, the power to alter, amend, revoke,
or terminate shall be considered to exist on the date of the
decedent's death even though the exercise of the power is subject
to a precedent giving of notice or even though the alteration,
amendment, revocation, or termination takes effect only on the
expiration of a stated period after the exercise of the power,
whether or not on or before the date of the decedent's death notice
has been given or the power has been exercised. In such cases
proper adjustment shall be made representing the interests which
would have been excluded from the power if the decedent had lived,
and for such purpose, if the notice has not been given or the power
has not been exercised on or before the date of his death, such
notice shall be considered to have been given, or the power
exercised, on the date of his death.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 383; Pub. L. 86-141, Sec. 1,
Aug. 7, 1959, 73 Stat. 288; Pub. L. 87-834, Sec. 18(a)(2)(F), Oct.
16, 1962, 76 Stat. 1052; Pub. L. 94-455, title XIX, Sec. 1902
(a)(3), title XX, Sec. 2001(c)(1)(K), Oct. 4, 1976, 90 Stat. 1804,
1852.)
-MISC1-
AMENDMENTS
1976 - Subsec. (a)(1). Pub. L. 94-455, Sec. 2001(c)(1)(K)(i),
substituted "during the 3-year period ending on the date of the
decedent's death" for "in contemplation of decedent's death".
Subsec. (a)(2). Pub. L. 94-455, Sec. 2001(c)(1)(K)(ii),
substituted "during the 3-year period ending on the date of the
decedent's death" for "in contemplation of his death".
Subsec. (c). Pub. L. 94-455, Sec. 1902(a)(3), struck out subsec.
(c) which covered the effect of a disability in certain cases by
relating a mental disability to relinquish a power to a power, the
relinquishment of which would be deemed not to be a transfer for
purposes of chapter 4 of the Internal Revenue Code of 1939.
1962 - Subsec. (a). Pub. L. 87-834 struck out provisions which
excepted real property situated outside of the United States.
1959 - Subsec. (c). Pub. L. 86-141 added subsec. (c).
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 1902(a)(3) of Pub. L. 94-455 applicable to
estates of decedents dying after Oct. 4, 1976, see section
1902(c)(1) of Pub. L. 94-455, set out as a note under section 2011
of this title.
Amendment by section 2001(c)(1)(K)(i), (ii) of Pub. L. 94-455
applicable to estates of decedents dying after Dec. 31, 1976 but
not to transfers made before Jan. 1, 1977, see section 2001(d)(1)
of Pub. L. 94-455, set out as a note under section 2001 of this
title.
EFFECTIVE DATE OF 1962 AMENDMENT
Amendment by Pub. L. 87-834 applicable to estates of decedents
dying after Oct. 16, 1962, except as otherwise provided, see
section 18(b) of Pub. L. 87-834, set out as a note under section
2031 of this title.
EFFECTIVE DATE OF 1959 AMENDMENT
Section 2 of Pub. L. 86-141 provided that: "The amendment made by
the first section of this Act [amending this section] shall apply
only with respect to estates of decedents dying after August 16,
1954. No interest shall be allowed or paid on any overpayment
resulting from the application of the amendment made by the first
section of this Act with respect to any payment made before the
date of the enactment of this Act [Aug. 7, 1959]."
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2035, 2041, 2043, 2045,
2104, 2107, 6324 of this title.
-End-
-CITE-
26 USC Sec. 2039 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
Sec. 2039. Annuities
-STATUTE-
(a) General
The gross estate shall include the value of an annuity or other
payment receivable by any beneficiary by reason of surviving the
decedent under any form of contract or agreement entered into after
March 3, 1931 (other than as insurance under policies on the life
of the decedent), if, under such contract or agreement, an annuity
or other payment was payable to the decedent, or the decedent
possessed the right to receive such annuity or payment, either
alone or in conjunction with another for his life or for any period
not ascertainable without reference to his death or for any period
which does not in fact end before his death.
(b) Amount includible
Subsection (a) shall apply to only such part of the value of the
annuity or other payment receivable under such contract or
agreement as is proportionate to that part of the purchase price
therefor contributed by the decedent. For purposes of this section,
any contribution by the decedent's employer or former employer to
the purchase price of such contract or agreement (whether or not to
an employee's trust or fund forming part of a pension, annuity,
retirement, bonus or profit sharing plan) shall be considered to be
contributed by the decedent if made by reason of his employment.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 384; Pub. L. 85-866, title I,
Secs. 23(e), 67(a), Sept. 2, 1958, 72 Stat. 1622, 1658; Pub. L.
87-792, Sec. 7(i), Oct. 10, 1962, 76 Stat. 830; Pub. L. 89-365,
Sec. 2(a), Mar. 8, 1966, 80 Stat. 33; Pub. L. 91-172, title I, Sec.
101(j)(23), Dec. 30, 1969, 83 Stat. 528; Pub. L. 92-580, Sec. 2(a),
Oct. 27, 1972, 86 Stat. 1276; Pub. L. 93-406, title II, Sec.
2007(b)(4), Sept. 2, 1974, 88 Stat. 994; Pub. L. 94-455, title XX,
Sec. 2009(c)(1)-(3), Oct. 4, 1976, 90 Stat. 1894, 1895; Pub. L.
95-600, title I, Secs. 142(a), (b), 156(c)(4), title VII, Sec.
702(j)(1), Nov. 6, 1978, 92 Stat. 2796, 2803, 2931; Pub. L. 96-222,
title I, Sec. 101(a)(8)(B), Apr. 1, 1980, 94 Stat. 201; Pub. L.
97-34, title III, Secs. 311(d)(1), (h)(4), 313(b)(3), Aug. 13,
1981, 95 Stat. 280, 282, 286; Pub. L. 97-248, title II, Sec.
245(a), (b), Sept. 3, 1982, 96 Stat. 524; Pub. L. 97-448, title I,
Sec. 103(c)(9), Jan. 12, 1983, 96 Stat. 2377; Pub. L. 98-369, div.
A, title IV, Sec. 491(d)(34), title V, Sec. 525(a), July 18, 1984,
98 Stat. 851, 873; Pub. L. 99-514, title XVIII, Secs. 1848(d),
1852(e)(1)(A), Oct. 22, 1986, 100 Stat. 2857, 2868.)
-MISC1-
AMENDMENTS
1986 - Subsec. (c). Pub. L. 99-514, Sec. 1852(e)(1), struck out
subsec. (c) which provided an exclusion from gross estate of
certain annuity interests created by community property laws.
Subsec. (e). Pub. L. 99-514, Sec. 1848(d), struck out "or a bond
described in paragraph (3)" after "an annuity described in
paragraph (2)" in concluding provisions as such provisions were
applicable to obligations issued after Dec. 31, 1983, and prior to
repeal of subsec. (e) by Pub. L. 98-369, Sec. 525(a), see Effective
Date of 1984 Amendment note below.
1984 - Subsec. (c). Pub. L. 98-369, Sec. 525(a), substituted
provisions relating to exception of certain annuity interests
created by community property laws for provisions which related to
exemption of annuities under certain trusts and plans.
Subsec. (d). Pub. L. 98-369, Sec. 525(a), struck out subsec. (d)
which related to exemption of certain annuity interests created by
community property laws. See subsec. (c) of this section.
Subsec. (e). Pub. L. 98-369, Sec. 525(a), struck out subsec. (e)
which related to exclusion of individual retirement accounts.
Pub. L. 98-369, Sec. 491(d)(34), inserted "or" at end of par.
(1), substituted a period for ", or" at end of par. (2), struck out
par. (3) which excluded from the value of the gross estate the
value of an annuity receivable by any beneficiary, other than the
executor, under a retirement bond described in section 409(a), and
substituted in provision following par. (2) "or 408(d)(3)" for
"405(d)(3), 408(d)(3), or 409(b)(3)(C)", and substituted "or
annuity" for ", annuity, or bond" wherever appearing.
Subsecs. (f), (g). Pub. L. 98-369, Sec. 525(a), struck out
subsec. (f) which related to lump sum distributions and an
exception where the recipient elects not to take 10-year averaging,
and subsec. (g) which related to a $100,000 limitation on the
exclusions under subsecs. (c) and (e).
1983 - Subsec. (f)(1). Pub. L. 97-448, Sec. 103(c)(9)(A),
designated existing provisions as subpar. (A), substituted "without
regard to the third sentence of section 402(e)(4)(A))" for "without
regard to the next to the last sentence of section 402(e)(4)(A)" in
subpar. (A) as so designated, and added subpar. (B).
Subsec. (f)(2). Pub. L. 97-448, Sec. 103(c)(9)(B), substituted
"An amount described" for "A lump sum distribution described".
1982 - Subsec. (c). Pub. L. 97-248, Sec. 245(b), substituted
"Subject to the limitation of subsection (g), notwithstanding any
other provision of this section" for "Notwithstanding the
provisions of this section".
Subsec. (e). Pub. L. 97-248, Sec. 245(b), substituted "Subject to
the limitation of subsection (g), notwithstanding any other
provision of this section" for "Notwithstanding the provisions of
this section".
Subsec. (g). Pub. L. 97-248, Sec. 245(a), added subsec. (g).
1981 - Subsec. (c). Pub. L. 97-34, Sec. 311(d)(1), provided that
for purposes of subsec. (c), any deductible employee contributions,
within the meaning of par. (5) of section 72(o), shall be
considered as made by a person other than the decedent.
Subsec. (e). Pub. L. 97-34, Sec. 313(b)(3), inserted reference to
rollover contribution described in section 405(d)(3).
Pub. L. 97-34, Sec. 311(h)(4), substituted "section 219" for
"section 219 or 220".
1980 - Subsec. (f)(2). Pub. L. 96-222 substituted "(without the
application of paragraph (2) thereof), except to the extent that
section 402(e)(4)(J) applies to such distribution" for "without the
application of paragraph (2) thereof".
1978 - Subsec. (c). Pub. L. 95-600, Sec. 142(a), substituted
"(other than an amount described in subsection (f))" for "(other
than a lump sum distribution described in section 402(e)(4),
determined without regard to the next to the last sentence of
section 402(e)(4)(A))" in provisions preceding par. (1).
Subsec. (e). Pub. L. 95-600, Secs. 156(c)(4), 702(j)(1), inserted
"section 403(b)(8) (but only to the extent such contribution is
attributed to a distribution from a contract described in
subsection (c)(3))," after "403(a)(4)" and inserted "or 220" after
"section 219" wherever appearing in provisions following par. (3).
Subsec. (f). Pub. L. 95-600, Sec. 142(b), added subsec. (f).
1976 - Subsec. (c). Pub. L. 94-455, Sec. 2009(c)(2), (3),
substituted "other payment (other than a lump sum distribution
described in section 402(e)(4), determined without regard to the
next to the last sentence of section 402(e)(4)(A)) receivable by
any beneficiary" for "other payment receivable by any beneficiary"
in provisions preceding par. (1) and substituted "For purposes of
this subsection, contributions or payments on behalf of the
decedent while he was an employee within the meaning of section
401(c)(1) made under a trust or plan described in paragraph (1) or
(2) shall, to the extent allowable as a deduction under section
404, be considered to be made by a person other than the decedent
and, to the extent not so allowable, shall be considered to be made
by the decedent" for "For purposes of this subsection,
contributions or payments on behalf of the decedent while he was an
employee within the meaning of section 401(c)(1) made under a trust
or plan described in paragraph (1) or (2) shall be considered to be
contributions or payments made by the decedent" in provisions
following par. (4).
Subsec. (e). Pub. L. 94-455, Sec. 2009(c)(1), added subsec. (e).
1974 - Subsec. (c). Pub. L. 93-406 inserted reference to section
1452(d) in provisions following par. (4).
1972 - Subsec. (d). Pub. L. 92-580 added subsec. (d).
1969 - Subsec. (c)(3). Pub. L. 91-172 substituted "section
170(b)(1)(A)(ii) or (vi), or which is a religious organization
(other than a trust)," for "section 503(b) (1), (2), or (3),".
1966 - Subsec. (c). Pub. L. 89-365 added par. (4), inserted
reference to chapter 73 of title 10 of the United States Code in
the enumeration of the plans and contracts set out in the
prohibition against allowance of exclusion for that part of the
value of the amount payable under the plan or contract in the
proportion that the total payments or contributions made by the
decedent bear to the total payments or contributions made, and
provided that, for purposes of this section, amounts payable under
chapter 73 of title 10 are attributable to payments or
contributions made by the decedent only to the extent of amounts
deposited by him pursuant to section 1438 of title 10.
1962 - Subsec. (c). Pub. L. 87-792 substituted "was a plan
described in section 403(a)" for "met the requirements of section
401(a)(3), (4), (5), and (6)" in par. (2), and inserted sentence
providing, for purposes of this subsection, that contributions or
payments on behalf of the decedent while he was an employee within
the meaning of section 401(c)(1) made under a trust or plan
described in paragraph (1) or (2) shall be considered to be
contributions or payments made by the decedent.
1958 - Subsec. (c)(2). Pub. L. 85-866, Sec. 67(a), inserted "(4),
(5), and (6)" after "section 401(a)(3)".
Subsec. (c)(3) and closing sentences. Pub. L. 85-866, Sec. 23(e),
added par. (3), inserted "or under contract described in paragraph
(3)" in second sentence of subsec. (c) and substituted "paragraph
(1) or (2) shall not be considered to be contributed by the
decedent, and contributions or payments made by the decedent's
employer or former employer toward the purchase of an annuity
contract described in paragraph (3) shall, to the extent excludable
from gross income under section 403(b)," for "this subsection
shall" in third sentence of subsec. (c).
EFFECTIVE DATE OF 1986 AMENDMENT
Section 1852(e)(1)(B) of Pub. L. 99-514 provided that: "The
amendment made by subparagraph (A) [amending this section] shall
apply to estates of decedents dying after the date of the enactment
of this Act [Oct. 22, 1986]."
Amendment by section 1848(d) of Pub. L. 99-514 effective, except
as otherwise provided, as if included in the provisions of the Tax
Reform Act of 1984, Pub. L. 98-369, div. A, to which such amendment
relates, see section 1881 of Pub. L. 99-514, set out as a note
under section 48 of this title.
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by section 491(d)(34) of Pub. L. 98-369 applicable to
obligations issued after Dec. 31, 1983, see section 491(f)(1) of
Pub. L. 98-369, set out as a note under section 62 of this title.
Section 525(b)(1), (2), (4) of Pub. L. 98-369, as amended by Pub.
L. 99-514, title XVIII, Sec. 1852(e)(3), Oct. 22, 1986, 100 Stat.
2868, provided that:
"(1) In general. - The amendments made by this section [amending
this section] shall apply to the estates of decedents dying after
December 31, 1984.
"(2) Exception for participants in pay status. - The amendments
made by this section shall not apply to the estate of any decedent
who -
"(A) was a participant in any plan who was in pay status on
December 31, 1984, and
"(B) irrevocably elected the form of the benefit before the
date of the enactment of this Act [July 18, 1984].
"(4) Irrevocable election. - For purposes of paragraph (2) [set
out above] and section 245(c) of the Tax Equity and Fiscal
Responsibility Act of 1982 [see Effective Date of 1982 Amendment
note below], an individual who -
"(A) separated from service before January 1, 1985, with
respect to paragraph (2), or January 1, 1983, with respect to
section 245(c) of the Tax Equity and Fiscal Responsibility Act of
1982, and
"(B) meets the requirements of such paragraph or such section
other than the requirement that there be an irrevocable election,
and that the individual be in pay status,
shall be treated as having made an irrevocable election and as
being in pay status within the time prescribed with respect to a
form of benefit if such individual does not change such form of
benefit before death."
EFFECTIVE DATE OF 1983 AMENDMENT
Amendment by Pub. L. 97-448 effective, except as otherwise
provided, as if it had been included in the provision of the
Economic Recovery Tax Act of 1981, Pub. L. 97-34, to which such
amendment relates, see section 109 of Pub. L. 97-448, set out as a
note under section 1 of this title.
EFFECTIVE DATE OF 1982 AMENDMENT
Section 245(c) of Pub. L. 97-248, as amended by Pub. L. 98-369,
div. A, title V, Sec. 525(b)(3), July 18, 1984, 98 Stat. 874,
provided that: "The amendments made by this section [amending this
section] shall apply to the estates of decedents dying after
December 31, 1982, except that such amendments shall not apply to
the estate of any decedent who was a participant in any plan who
was in pay status on December 31, 1982, and irrevocably elected
before January 1, 1983, the form of benefit."
EFFECTIVE DATE OF 1981 AMENDMENT
Amendment by section 311(d)(1), (h)(4) of Pub. L. 97-34
applicable to taxable years beginning after Dec. 31, 1981, see
section 311(i)(1) of Pub. L. 97-34, set out as a note under section
219 of this title.
Amendment by section 313(b)(3) of Pub. L. 97-34 applicable to
redemptions after Aug. 13, 1981, in taxable years ending after such
date, see section 313(c) of Pub. L. 97-34, set out as a note under
section 219 of this title.
EFFECTIVE DATE OF 1980 AMENDMENT
Amendment by Pub. L. 96-222 applicable with respect to the
estates of decedents dying after Apr. 1, 1980, see section
101(b)(1)(D) of Pub. L. 96-222, set out as a note under section 691
of this title.
EFFECTIVE DATE OF 1978 AMENDMENT
Section 142(c) of Pub. L. 95-600 provided that: "The amendments
made by this section [amending this section] shall apply with
respect to the estates of decedents dying after December 31, 1978."
Amendment by section 156(c)(4) of Pub. L. 95-600 applicable to
distributions or transfers made after Dec. 31, 1977, in taxable
years beginning after such date, see section 156(d) of Pub. L.
95-600, set out as a note under section 403 of this title.
Section 702(j)(3)(A) of Pub. L. 95-600 provided that: "The
amendment made by paragraph (1) [amending this section] shall apply
to the estates of decedents dying after December 31, 1976."
EFFECTIVE DATE OF 1976 AMENDMENT
Section 2009(e)(3)(A) of Pub. L. 94-455 provided that: "The
amendments made by paragraphs (1), (2), and (3) of subsection (c)
[amending this section] shall apply to the estates of decedents
dying after December 31, 1976."
EFFECTIVE DATE OF 1974 AMENDMENT
Amendment by Pub. L. 93-406 applicable to taxable years ending on
or after Sept. 21, 1972, with respect to individuals dying on or
after Sept. 21, 1972, see section 2007(c) of Pub. L. 93-406, set
out as a note under section 122 of this title.
EFFECTIVE DATE OF 1972 AMENDMENT
Section 2(b) of Pub. L. 92-580, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: "The
amendment made by subsection (a) [amending this section] shall
apply with respect to estate of decedents for which the period
prescribed by the Internal Revenue Code of 1986 [formerly I.R.C.
1954] for filing of a claim for credit or refund of an overpayment
of estate tax ends on or after the date of enactment of this Act
[Oct. 27, 1972]. No interest shall be allowed or paid on any
overpayment of estate tax resulting from the application of the
amendment made by subsection (a) for any period prior to the
expiration of the one hundred and eightieth day following the date
of the enactment of this Act."
EFFECTIVE DATE OF 1969 AMENDMENT
Amendment by Pub. L. 91-172 effective Jan. 1, 1970, see section
101(k)(1) of Pub. L. 91-172, set out as an Effective Date note
under section 4940 of this title.
EFFECTIVE DATE OF 1966 AMENDMENT
Section 2(c) of Pub. L. 89-365 provided that: "The amendments
made by subsection (a) [amending this section] shall apply with
respect to decedents dying after December 31, 1965. The amendments
made by subsection (b) [amending section 2517 of this title] shall
apply with respect to calendar years after 1965."
EFFECTIVE DATE OF 1962 AMENDMENT
Amendment by Pub. L. 87-792 applicable to taxable years beginning
after Dec. 31, 1962, see section 8 of Pub. L. 87-792, set out as a
note under section 22 of this title.
EFFECTIVE DATE OF 1958 AMENDMENT
Amendment by section 23(e) of Pub. L. 85-866 applicable with
respect to estates of decedents dying after Dec. 31, 1957, see
section 23(g) of Pub. L. 85-866, set out as a note under section
403 of this title.
Section 67(b) of Pub. L. 85-866 provided that: "The amendment
made by subsection (a) [amending this section] shall apply with
respect to estates of decedents dying after December 31, 1953."
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989
For provisions directing that if any amendments made by subtitle
A or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or
title XVIII [Secs. 1800-1899A] of Pub. L. 99-514 require an
amendment to any plan, such plan amendment shall not be required to
be made before the first plan year beginning on or after Jan. 1,
1989, see section 1140 of Pub. L. 99-514, as amended, set out as a
note under section 401 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 406, 407, 2045, 2056,
6324 of this title.
-End-
-CITE-
26 USC Sec. 2040 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
Sec. 2040. Joint interests
-STATUTE-
(a) General rule
The value of the gross estate shall include the value of all
property to the extent of the interest therein held as joint
tenants with right of survivorship by the decedent and any other
person, or as tenants by the entirety by the decedent and spouse,
or deposited, with any person carrying on the banking business, in
their joint names and payable to either or the survivor, except
such part thereof as may be shown to have originally belonged to
such other person and never to have been received or acquired by
the latter from the decedent for less than an adequate and full
consideration in money or money's worth: Provided, That where such
property or any part thereof, or part of the consideration with
which such property was acquired, is shown to have been at any time
acquired by such other person from the decedent for less than an
adequate and full consideration in money or money's worth, there
shall be excepted only such part of the value of such property as
is proportionate to the consideration furnished by such other
person: Provided further, That where any property has been acquired
by gift, bequest, devise, or inheritance, as a tenancy by the
entirety by the decedent and spouse, then to the extent of one-half
of the value thereof, or, where so acquired by the decedent and any
other person as joint tenants with right of survivorship and their
interests are not otherwise specified or fixed by law, then to the
extent of the value of a fractional part to be determined by
dividing the value of the property by the number of joint tenants
with right of survivorship.
(b) Certain joint interests of husband and wife
(1) Interests of spouse excluded from gross estate
Notwithstanding subsection (a), in the case of any qualified
joint interest, the value included in the gross estate with
respect to such interest by reason of this section is one-half of
the value of such qualified joint interest.
(2) Qualified joint interest defined
For purposes of paragraph (1), the term "qualified joint
interest" means any interest in property held by the decedent and
the decedent's spouse as -
(A) tenants by the entirety, or
(B) joint tenants with right of survivorship, but only if the
decedent and the spouse of the decedent are the only joint
tenants.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 385; Pub. L. 87-834, Sec.
18(a)(2)(G), Oct. 16, 1962, 76 Stat. 1052; Pub. L. 94-455, title
XX, Sec. 2002(c)(1), (3), Oct. 4, 1976, 90 Stat. 1855, 1856; Pub.
L. 95-600, title V, Sec. 511(a), title VII, Sec. 702(k)(2), Nov. 6,
1978, 92 Stat. 2881, 2932; Pub. L. 96-222, title I, Sec. 105(a)(3),
Apr. 1, 1980, 94 Stat. 218; Pub. L. 97-34, title IV, Sec.
403(c)(1)-(3)(A), Aug. 13, 1981, 95 Stat. 301, 302.)
-MISC1-
AMENDMENTS
1981 - Subsec. (a). Pub. L. 97-34, Sec. 403(c)(2), substituted
"joint tenants with right of survivorship" for "joint tenants" in
three places.
Subsec. (b)(2). Pub. L. 97-34, Sec. 403(c)(1), in redefining
"qualified joint interest" substituted provision defining term as
meaning any interest in property held by the decedent and the
decedent's spouse as tenants by the entirety, or joint tenants with
right of survivorship, but only if the decedent and the spouse of
the decedent are the only joint tenants for provision defining the
term as meaning any interest in property held by the decedent and
the decedent's spouse as joint tenants or as tenants by the
entirety, but only if such joint interest was created by the
decedent, the decedent's spouse, or both, in the case of personal
property, the creation of such joint interest constituted in whole
or in part a gift for purposes of chapter 12, or in the case of
real property, an election under section 2515 applies with respect
to the creation of such joint interest, and in the case of a joint
tenancy, only the decedent and the decedent's spouse are joint
tenants.
Subsecs. (c) to (e). Pub. L. 97-34, Sec. 403(c)(3)(A), repealed
subsec. (c) respecting value where spouse of decedent materially
participated in farm or other business, subsec. (d) relating to
joint interests of husband and wife created before 1977, and
subsec. (e) covering treatment of certain post-1976 terminations.
1980 - Subsec. (c)(1). Pub. L. 96-222, Sec. 105(a)(3)(B),
substituted "subsection (a)" for "subsections (a)".
Subsec. (c)(2)(C). Pub. L. 96-222, Sec. 105(a)(3)(A), added
subpar. (C).
1978 - Subsec. (c). Pub. L. 95-600, Sec. 511(a), added subsec.
(c).
Subsecs. (d), (e). Pub. L. 95-600, Sec. 702(k)(2), added subsecs.
(d) and (e).
1976 - Pub. L. 94-455 designated existing provisions as subsec.
(a), added heading for subsec. (a), and added subsec. (b).
1962 - Pub. L. 87-834 struck out provisions which excepted real
property outside of the United States.
EFFECTIVE DATE OF 1981 AMENDMENT
Amendment by Pub. L. 97-34 applicable to estates of decedents
dying after Dec. 31, 1981, see section 403(e) of Pub. L. 97-34, set
out as a note under section 2056 of this title.
EFFECTIVE DATE OF 1980 AMENDMENT
Amendment by Pub. L. 96-222 effective, except as otherwise
provided, as if it had been included in the provisions of the
Revenue Act of 1978, Pub. L. 95-600, to which such amendment
relates, see section 201 of Pub. L. 96-222, set out as a note under
section 32 of this title.
EFFECTIVE DATE OF 1978 AMENDMENT
Section 511(b) of Pub. L. 95-600 provided that: "The amendment
made by subsection (a) [amending this section] shall apply with
respect to estates of decedents dying after December 31, 1978."
EFFECTIVE DATE OF 1976 AMENDMENT
Section 2002(d)(3) of Pub. L. 94-455 provided that: "The
amendment made by subsection (c) [amending this section and section
2515 of this title] shall apply to joint interests created after
December 31, 1976."
EFFECTIVE DATE OF 1962 AMENDMENT
Amendment by Pub. L. 87-834 applicable to estates of decedents
dying after Oct. 16, 1962, except as otherwise provided, see
section 18(b) of Pub. L. 87-834, set out as a note under section
2031 of this title.
CONSIDERATION GIVEN BEFORE JULY 14, 1988 BY DECEDENT TO NONCITIZEN
SPOUSE TREATED AS ORIGINALLY BELONGING TO SPOUSE
Pub. L. 101-239, title VII, Sec. 7815(d)(16), Dec. 19, 1989, 103
Stat. 2419, as amended by Pub. L. 101-508, title XI, Sec.
11701(l)(3), Nov. 5, 1990, 104 Stat. 1388-513, provided that: "For
purposes of applying section 2040(a) of the Internal Revenue Code
of 1986 with respect to any joint interest to which section 2040(b)
of such Code does not apply solely by reason of section
2056(d)(1)(B) of such Code, any consideration furnished before July
14, 1988, by the decedent for such interest to the extent treated
as a gift to the spouse of the decedent for purposes of chapter 12
of such Code (or would have been so treated if the donor were a
citizen of the United States) shall be treated as consideration
originally belonging to such spouse and never acquired by such
spouse from the decedent."
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 1023, 2045, 2056, 6324 of
this title.
-End-
-CITE-
26 USC Sec. 2041 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
Sec. 2041. Powers of appointment
-STATUTE-
(a) In general
The value of the gross estate shall include the value of all
property -
(1) Powers of appointment created on or before October 21, 1942
To the extent of any property with respect to which a general
power of appointment created on or before October 21, 1942, is
exercised by the decedent -
(A) by will, or
(B) by a disposition which is of such nature that if it were
a transfer of property owned by the decedent, such property
would be includible in the decedent's gross estate under
sections 2035 to 2038, inclusive;
but the failure to exercise such a power or the complete release
of such a power shall not be deemed an exercise thereof. If a
general power of appointment created on or before October 21,
1942, has been partially released so that it is no longer a
general power of appointment, the exercise of such power shall
not be deemed to be the exercise of a general power of
appointment if -
(i) such partial release occurred before November 1, 1951,
or
(ii) the donee of such power was under a legal disability
to release such power on October 21, 1942, and such partial
release occurred not later than 6 months after the
termination of such legal disability.
(2) Powers created after October 21, 1942
To the extent of any property with respect to which the
decedent has at the time of his death a general power of
appointment created after October 21, 1942, or with respect to
which the decedent has at any time exercised or released such a
power of appointment by a disposition which is of such nature
that if it were a transfer of property owned by the decedent,
such property would be includible in the decedent's gross estate
under sections 2035 to 2038, inclusive. For purposes of this
paragraph (2), the power of appointment shall be considered to
exist on the date of the decedent's death even though the
exercise of the power is subject to a precedent giving of notice
or even though the exercise of the power takes effect only on the
expiration of a stated period after its exercise, whether or not
on or before the date of the decedent's death notice has been
given or the power has been exercised.
(3) Creation of another power in certain cases
To the extent of any property with respect to which the
decedent -
(A) by will, or
(B) by a disposition which is of such nature that if it were
a transfer of property owned by the decedent such property
would be includible in the decedent's gross estate under
section 2035, 2036, or 2037,
exercises a power of appointment created after October 21, 1942,
by creating another power of appointment which under the
applicable local law can be validly exercised so as to postpone
the vesting of any estate or interest in such property, or
suspend the absolute ownership or power of alienation of such
property, for a period ascertainable without regard to the date
of the creation of the first power.
(b) Definitions
For purposes of subsection (a) -
(1) General power of appointment
The term "general power of appointment" means a power which is
exercisable in favor of the decedent, his estate, his creditors,
or the creditors of his estate; except that -
(A) A power to consume, invade, or appropriate property for
the benefit of the decedent which is limited by an
ascertainable standard relating to the health, education,
support, or maintenance of the decedent shall not be deemed a
general power of appointment.
(B) A power of appointment created on or before October 21,
1942, which is exercisable by the decedent only in conjunction
with another person shall not be deemed a general power of
appointment.
(C) In the case of a power of appointment created after
October 21, 1942, which is exercisable by the decedent only in
conjunction with another person -
(i) If the power is not exercisable by the decedent except
in conjunction with the creator of the power - such power
shall not be deemed a general power of appointment.
(ii) If the power is not exercisable by the decedent except
in conjunction with a person having a substantial interest in
the property, subject to the power, which is adverse to
exercise of the power in favor of the decedent - such power
shall not be deemed a general power of appointment. For the
purposes of this clause a person who, after the death of the
decedent, may be possessed of a power of appointment (with
respect to the property subject to the decedent's power)
which he may exercise in his own favor shall be deemed as
having an interest in the property and such interest shall be
deemed adverse to such exercise of the decedent's power.
(iii) If (after the application of clauses (i) and (ii))
the power is a general power of appointment and is
exercisable in favor of such other person - such power shall
be deemed a general power of appointment only in respect of a
fractional part of the property subject to such power, such
part to be determined by dividing the value of such property
by the number of such persons (including the decedent) in
favor of whom such power is exercisable.
For purposes of clauses (ii) and (iii), a power shall be deemed
to be exercisable in favor of a person if it is exercisable in
favor of such person, his estate, his creditors, or the
creditors of his estate.
(2) Lapse of power
The lapse of a power of appointment created after October 21,
1942, during the life of the individual possessing the power
shall be considered a release of such power. The preceding
sentence shall apply with respect to the lapse of powers during
any calendar year only to the extent that the property, which
could have been appointed by exercise of such lapsed powers,
exceeded in value, at the time of such lapse, the greater of the
following amounts:
(A) $5,000, or
(B) 5 percent of the aggregate value, at the time of such
lapse, of the assets out of which, or the proceeds of which,
the exercise of the lapsed powers could have been satisfied.
(3) Date of creation of power
For purposes of this section, a power of appointment created by
a will executed on or before October 21, 1942, shall be
considered a power created on or before such date if the person
executing such will dies before July 1, 1949, without having
republished such will, by codicil or otherwise, after October 21,
1942.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 385; Pub. L. 87-834, Sec.
18(a)(2)(H), Oct. 16, 1962, 76 Stat. 1052; Pub. L. 94-455, title
XX, Sec. 2009(b)(4)(A), Oct. 4, 1976, 90 Stat. 1894.)
-MISC1-
AMENDMENTS
1976 - Subsec. (a)(2). Pub. L. 94-455 struck out provision that a
disclaimer or renunciation of a power of appointment not be deemed
a release of that power.
1962 - Subsec. (a). Pub. L. 87-834 struck out provisions which
excepted real property situated outside of the United States.
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by Pub. L. 94-455 applicable to transfers creating an
interest in person disclaiming made after Dec. 31, 1976, see
section 2009(e)(2) of Pub. L. 94-455, set out as a note under
section 2518 of this title.
EFFECTIVE DATE OF 1962 AMENDMENT
Amendment by Pub. L. 87-834 applicable to estates of decedents
dying after Oct. 16, 1962, except as otherwise provided, see
section 18(b) of Pub. L. 87-834, set out as a note under section
2031 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2013, 2037, 2043, 2045,
2055, 2106, 2207, 6324 of this title.
-End-
-CITE-
26 USC Sec. 2042 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
Sec. 2042. Proceeds of life insurance
-STATUTE-
The value of the gross estate shall include the value of all
property -
(1) Receivable by the executor
To the extent of the amount receivable by the executor as
insurance under policies on the life of the decedent.
(2) Receivable by other beneficiaries
To the extent of the amount receivable by all other
beneficiaries as insurance under policies on the life of the
decedent with respect to which the decedent possessed at his
death any of the incidents of ownership, exercisable either alone
or in conjunction with any other person. For purposes of the
preceding sentence, the term "incident of ownership" includes a
reversionary interest (whether arising by the express terms of
the policy or other instrument or by operation of law) only if
the value of such reversionary interest exceeded 5 percent of the
value of the policy immediately before the death of the decedent.
As used in this paragraph, the term "reversionary interest"
includes a possibility that the policy, or the proceeds of the
policy, may return to the decedent or his estate, or may be
subject to a power of disposition by him. The value of a
reversionary interest at any time shall be determined (without
regard to the fact of the decedent's death) by usual methods of
valuation, including the use of tables of mortality and actuarial
principles, pursuant to regulations prescribed by the Secretary.
In determining the value of a possibility that the policy or
proceeds thereof may be subject to a power of disposition by the
decedent, such possibility shall be valued as if it were a
possibility that such policy or proceeds may return to the
decedent or his estate.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 387; Pub. L. 94-455, title XIX,
Sec. 1906(b)(13) (A), Oct. 4, 1976, 90 Stat. 1834.)
-MISC1-
AMENDMENTS
1976 - Pub. L. 94-455 struck out "or his delegate" after
"Secretary".
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2035, 2045, 6324 of this
title.
-End-
-CITE-
26 USC Sec. 2043 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
Sec. 2043. Transfers for insufficient consideration
-STATUTE-
(a) In general
If any one of the transfers, trusts, interests, rights, or powers
enumerated and described in sections 2035 to 2038, inclusive, and
section 2041 is made, created, exercised, or relinquished for a
consideration in money or money's worth, but is not a bona fide
sale for an adequate and full consideration in money or money's
worth, there shall be included in the gross estate only the excess
of the fair market value at the time of death of the property
otherwise to be included on account of such transaction, over the
value of the consideration received therefor by the decedent.
(b) Marital rights not treated as consideration
(1) In general
For purposes of this chapter, a relinquishment or promised
relinquishment of dower or curtesy, or of a statutory estate
created in lieu of dower or curtesy, or of other marital rights
in the decedent's property or estate, shall not be considered to
any extent a consideration "in money or money's worth".
(2) Exception
For purposes of section 2053 (relating to expenses,
indebtedness, and taxes), a transfer of property which satisfies
the requirements of paragraph (1) of section 2516 (relating to
certain property settlements) shall be considered to be made for
an adequate and full consideration in money or money's worth.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 388; Pub. L. 98-369, div. A,
title IV, Sec. 425(a)(1), July 18, 1984, 98 Stat. 803.)
-MISC1-
AMENDMENTS
1984 - Subsec. (b). Pub. L. 98-369 amended subsec. (b) generally,
designating existing provisions as par. (1) and adding par. (2).
EFFECTIVE DATE OF 1984 AMENDMENT
Section 425(c)(1) of Pub. L. 98-369 provided that: "The
amendments made by subsection (a) [amending this section and
section 2053 of this title] shall apply to estates of decedents
dying after the date of the enactment of this Act [July 18, 1984]."
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in section 2053 of this title.
-End-
-CITE-
26 USC Sec. 2044 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
Sec. 2044. Certain property for which marital deduction was
previously allowed
-STATUTE-
(a) General rule
The value of the gross estate shall include the value of any
property to which this section applies in which the decedent had a
qualifying income interest for life.
(b) Property to which this section applies
This section applies to any property if -
(1) a deduction was allowed with respect to the transfer of
such property to the decedent -
(A) under section 2056 by reason of subsection (b)(7)
thereof, or
(B) under section 2523 by reason of subsection (f) thereof,
and
(2) section 2519 (relating to dispositions of certain life
estates) did not apply with respect to a disposition by the
decedent of part or all of such property.
(c) Property treated as having passed from decedent
For purposes of this chapter and chapter 13, property includible
in the gross estate of the decedent under subsection (a) shall be
treated as property passing from the decedent.
-SOURCE-
(Added Pub. L. 97-34, title IV, Sec. 403(d)(3)(A)(i), Aug. 13,
1981, 95 Stat. 304; amended Pub. L. 97-448, title I, Sec.
104(a)(1)(B), Jan. 12, 1983, 96 Stat. 2380.)
-MISC1-
PRIOR PROVISIONS
A prior section 2044 was renumbered section 2045 of this title.
AMENDMENTS
1983 - Subsec. (c). Pub. L. 97-448 added subsec. (c).
EFFECTIVE DATE OF 1983 AMENDMENT
Amendment by Pub. L. 97-448 effective, except as otherwise
provided, as if it had been included in the provision of the
Economic Recovery Tax Act of 1981, Pub. L. 97-34, to which such
amendment relates, see section 109 of Pub. L. 97-448, set out as a
note under section 1 of this title.
EFFECTIVE DATE
Section applicable to estates of decedents dying after Dec. 31,
1981, see section 403(e) of Pub. L. 97-34, set out as an Effective
Date of 1981 Amendment note under section 2056 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 1014, 2053, 2207A, 2523,
2642 of this title.
-End-
-CITE-
26 USC Sec. 2045 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
Sec. 2045. Prior interests
-STATUTE-
Except as otherwise specifically provided by law, sections 2034
to 2042, inclusive, shall apply to the transfers, trusts, estates,
interests, rights, powers, and relinquishment of powers, as
severally enumerated and described therein, whenever made, created,
arising, existing, exercised, or relinquished.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 388, Sec. 2044; Pub. L. 94-455,
title XX, Sec. 2001(c)(1)(M), Oct. 4, 1976, 90 Stat. 1853;
renumbered Sec. 2045, Pub. L. 97-34, title IV, Sec.
403(d)(3)(A)(i), Aug. 13, 1981, 95 Stat. 304.)
-MISC1-
PRIOR PROVISIONS
A prior section 2045 was renumbered section 2046 of this title.
AMENDMENTS
1976 - Pub. L. 94-455 substituted "specifically provided by law"
for "specifically provided therein".
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by Pub. L. 94-455 applicable to estates of decedents
dying after Dec. 31, 1976, see section 2001(d) of Pub. L. 94-455,
set out as a note under section 2001 of this title.
-End-
-CITE-
26 USC Sec. 2046 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART III - GROSS ESTATE
-HEAD-
Sec. 2046. Disclaimers
-STATUTE-
For provisions relating to the effect of a qualified
disclaimer for purposes of this chapter, see section 2518.
-SOURCE-
(Added Pub. L. 94-455, title XX, Sec. 2009(b)(2), Oct. 4, 1976, 90
Stat. 1893, Sec. 2045; renumbered Sec. 2046, Pub. L. 97-34, title
IV, Sec. 403(d)(3)(A)(i), Aug. 13, 1981, 95 Stat. 304.)
-MISC1-
EFFECTIVE DATE
Section applicable to transfers creating an interest in person
disclaiming made after Dec. 31, 1976, see section 2009(e)(2) of
Pub. L. 94-455, set out as a note under section 2518 of this title.
-End-
-CITE-
26 USC PART IV - TAXABLE ESTATE 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART IV - TAXABLE ESTATE
-HEAD-
PART IV - TAXABLE ESTATE
-MISC1-
Sec.
2051. Definition of taxable estate.
[2052. Repealed.]
2053. Expenses, indebtedness, and taxes.
2054. Losses.
2055. Transfers for public, charitable, and religious uses.
2056. Bequests, etc., to surviving spouse.
2056A. Qualified domestic trust.
2057. Family-owned business interests.
2058. State death taxes.
AMENDMENTS
2001 - Pub. L. 107-16, title V, Sec. 532(c)(14), June 7, 2001,
115 Stat. 75, added item 2058.
1998 - Pub. L. 105-206, title VI, Sec. 6006(b)(1)(F), July 22,
1998, 112 Stat. 808, added item 2057.
1990 - Pub. L. 101-508, title XI, Sec. 11704(a)(39), Nov. 5,
1990, 104 Stat. 1388-520, amended directory language of section
5033(a)(3) of Pub. L. 100-647. See 1988 Amendment note below.
Pub. L. 101-508, title XI, Sec. 11704(a)(16), Nov. 5, 1990, 104
Stat. 1388-518, substituted "trust" for "trusts" in item 2056A.
1989 - Pub. L. 101-239, title VII, Sec. 7304(a)(2)(E), Dec. 19,
1989, 103 Stat. 2353, struck out item 2057 "Sales of employer
securities to employee stock ownership plans or worker-owned
cooperatives".
1988 - Pub. L. 100-647, title V, Sec. 5033(a)(3), Nov. 10, 1988,
102 Stat. 3672, as amended by Pub. L. 101-508, title XI, Sec.
11704(a)(39), Nov. 5, 1990, 104 Stat. 1388-520, added item 2056A.
1986 - Pub. L. 99-514, title XI, Sec. 1172(b)(3), Oct. 22, 1986,
100 Stat. 2515, added item 2057.
1981 - Pub. L. 97-34, title IV, Sec. 427(b), Aug. 13, 1981, 95
Stat. 318, struck out item 2057 "Bequests, etc., to certain minor
children".
1976 - Pub. L. 94-455, title XX, Secs. 2001(c)(1)(N)(iv),
2007(b), Oct. 4, 1976, 90 Stat. 1853, 1890, added item 2057 and
struck out item 2052 "Exemption".
-End-
-CITE-
26 USC Sec. 2051 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART IV - TAXABLE ESTATE
-HEAD-
Sec. 2051. Definition of taxable estate
-STATUTE-
For purposes of the tax imposed by section 2001, the value of the
taxable estate shall be determined by deducting from the value of
the gross estate the deductions provided for in this part.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 388; Pub. L. 95-600, title VII,
Sec. 702(r)(2), Nov. 6, 1978, 92 Stat. 2938.)
-MISC1-
AMENDMENTS
1978 - Pub. L. 95-600 struck out "exemption and" after "gross
estate the".
EFFECTIVE DATE OF 1978 AMENDMENT
Section 702(r)(5) of Pub. L. 95-600 provided that: "The
amendments made by this subsection [amending this section and
sections 1016, 6324B, and 6698A of this title] shall apply to
estates of decedents dying after December 31, 1976."
-End-
-CITE-
26 USC Sec. 2052 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART IV - TAXABLE ESTATE
-HEAD-
[Sec. 2052. Repealed. Pub. L. 94-455, title XX, Sec. 2001(a)(4),
Oct. 4, 1976, 90 Stat. 1848]
-MISC1-
Section, act Aug. 16, 1954, ch. 736, 68A Stat. 389, provided for
an exemption of $60,000 to be deducted from gross estate in
determining value of taxable estate.
EFFECTIVE DATE OF REPEAL
Repeal applicable to estates of decedents dying after Dec. 31,
1976, see section 2001(d)(1) of Pub. L. 94-455, set out as an
Effective Date of 1976 Amendment note under section 2001 of this
title.
-End-
-CITE-
26 USC Sec. 2053 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART IV - TAXABLE ESTATE
-HEAD-
Sec. 2053. Expenses, indebtedness, and taxes
-STATUTE-
(a) General rule
For purposes of the tax imposed by section 2001, the value of the
taxable estate shall be determined by deducting from the value of
the gross estate such amounts -
(1) for funeral expenses,
(2) for administration expenses,
(3) for claims against the estate, and
(4) for unpaid mortgages on, or any indebtedness in respect of,
property where the value of the decedent's interest therein,
undiminished by such mortgage or indebtedness, is included in the
value of the gross estate,
as are allowable by the laws of the jurisdiction, whether within or
without the United States, under which the estate is being
administered.
(b) Other administration expenses
Subject to the limitations in paragraph (1) of subsection (c),
there shall be deducted in determining the taxable estate amounts
representing expenses incurred in administering property not
subject to claims which is included in the gross estate to the same
extent such amounts would be allowable as a deduction under
subsection (a) if such property were subject to claims, and such
amounts are paid before the expiration of the period of limitation
for assessment provided in section 6501.
(c) Limitations
(1) Limitations applicable to subsections (a) and (b)
(A) Consideration for claims
The deduction allowed by this section in the case of claims
against the estate, unpaid mortgages, or any indebtedness
shall, when founded on a promise or agreement, be limited to
the extent that they were contracted bona fide and for an
adequate and full consideration in money or money's worth;
except that in any case in which any such claim is founded on a
promise or agreement of the decedent to make a contribution or
gift to or for the use of any donee described in section 2055
for the purposes specified therein, the deduction for such
claims shall not be so limited, but shall be limited to the
extent that it would be allowable as a deduction under section
2055 if such promise or agreement constituted a bequest.
(B) Certain taxes
Any income taxes on income received after the death of the
decedent, or property taxes not accrued before his death, or
any estate, succession, legacy, or inheritance taxes, shall not
be deductible under this section.
(C) Certain claims by remaindermen
No deduction shall be allowed under this section for a claim
against the estate by a remainderman relating to any property
described in section 2044.
(D) Section 6166 interest
No deduction shall be allowed under this section for any
interest payable under section 6601 on any unpaid portion of
the tax imposed by section 2001 for the period during which an
extension of time for payment of such tax is in effect under
section 6166.
(2) Limitations applicable only to subsection (a)
In the case of the amounts described in subsection (a), there
shall be disallowed the amount by which the deductions specified
therein exceed the value, at the time of the decedent's death, of
property subject to claims, except to the extent that such
deductions represent amounts paid before the date prescribed for
the filing of the estate tax return. For purposes of this
section, the term "property subject to claims" means property
includible in the gross estate of the decedent which, or the
avails of which, would under the applicable law, bear the burden
of the payment of such deductions in the final adjustment and
settlement of the estate, except that the value of the property
shall be reduced by the amount of the deduction under section
2054 attributable to such property.
(d) Certain State and foreign death taxes
(1) General rule
Notwithstanding the provisions of subsection (c)(1)(B) of this
section, for purposes of the tax imposed by section 2001 the
value of the taxable estate may be determined, if the executor so
elects before the expiration of the period of limitation for
assessment provided in section 6501, by deducting from the value
of the gross estate the amount (as determined in accordance with
regulations prescribed by the Secretary) of -
(A) Any estate, succession, legacy, or inheritance tax
imposed by a State or the District of Columbia upon a transfer
by the decedent for public, charitable, or religious uses
described in section 2055 or 2106(a)(2), and
(B) any estate, succession, legacy, or inheritance tax
imposed by and actually paid to any foreign country, in respect
of any property situated within such foreign country and
included in the gross estate of a citizen or resident of the
United States, upon a transfer by the decedent for public,
charitable, or religious uses described in section 2055.
The determination under subparagraph (B) of the country within
which property is situated shall be made in accordance with the
rules applicable under subchapter B (sec. 2101 and following) in
determining whether property is situated within or without the
United States. Any election under this paragraph shall be
exercised in accordance with regulations prescribed by the
Secretary.
(2) Condition for allowance of deduction
No deduction shall be allowed under paragraph (1) for a State
death tax or a foreign death tax specified therein unless the
decrease in the tax imposed by section 2001 which results from
the deduction provided in paragraph (1) will inure solely for the
benefit of the public, charitable, or religious transferees
described in section 2055 or section 2106(a)(2). In any case
where the tax imposed by section 2001 is equitably apportioned
among all the transferees of property included in the gross
estate, including those described in sections 2055 and 2106(a)(2)
(taking into account any exemptions, credits, or deductions
allowed by this chapter), in determining such decrease, there
shall be disregarded any decrease in the Federal estate tax which
any transferees other than those described in sections 2055 and
2106(a)(2) are required to pay.
(3) Effect on credits for State and foreign death taxes of
deduction under this subsection
(A) Election
An election under this subsection shall be deemed a waiver of
the right to claim a credit, against the Federal estate tax,
under a death tax convention with any foreign country for any
tax or portion thereof in respect of which a deduction is taken
under this subsection.
(B) Cross references
See section 2011(d) for the effect of a deduction taken under
this subsection on the credit for State death taxes, and see
section 2014(f) for the effect of a deduction taken under this
subsection on the credit for foreign death taxes.
(e) Marital rights
For provisions treating certain relinquishments of marital
rights as consideration in money or money's worth, see section
2043(b)(2).
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 389; Feb. 20, 1956, ch. 63, Sec.
2, 70 Stat. 23; Pub. L. 85-866, title I, Sec. 102(c)(3), Sept. 2,
1958, 72 Stat. 1674; Pub. L. 86-175, Sec. 1, Aug. 21, 1959, 73
Stat. 396; Pub. L. 94-455, title XIX, Secs. 1902(a)(12) (B),
1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1806, 1834; Pub. L. 98-369,
div. A, title IV, Sec. 425(a)(2), title X, Sec. 1027(b), July 18,
1984, 98 Stat. 804, 1031; Pub. L. 100-647, title I, Sec.
1011A(g)(11), Nov. 10, 1988, 102 Stat. 3482; Pub. L. 105-34, title
V, Sec. 503(b)(1), title X, Sec. 1073(b)(3), Aug. 5, 1997, 111
Stat. 853, 948; Pub. L. 107-16, title V, Sec. 532(c)(5), June 7,
2001, 115 Stat. 74; Pub. L. 107-134, title I, Sec. 103(b)(2), Jan.
23, 2002, 115 Stat. 2431.)
-STATAMEND-
AMENDMENT OF SUBSECTION (D)
Pub. L. 107-16, title V, Sec. 532(c)(5), (d), title IX, Sec. 901,
June 7, 2001, 115 Stat. 74, 75, 901, provided that, applicable to
estates of decedents dying, and generation-skipping transfers,
after Dec. 31, 2004, subsection (d) of this section is temporarily
amended to read as follows:
(d) Certain foreign death taxes
(1) In general
Notwithstanding the provisions of subsection (c)(1)(B), for
purposes of the tax imposed by section 2001, the value of the
taxable estate may be determined, if the executor so elects
before the expiration of the period of limitation for assessment
provided in section 6501, by deducting from the value of the
gross estate the amount (as determined in accordance with
regulations prescribed by the Secretary) of any estate,
succession, legacy, or inheritance tax imposed by and actually
paid to any foreign country, in respect of any property situated
within such foreign country and included in the gross estate of a
citizen or resident of the United States, upon a transfer by the
decedent for public, charitable, or religious uses described in
section 2055. The determination under this paragraph of the
country within which property is situated shall be made in
accordance with the rules applicable under subchapter B (sec.
2101 and following) in determining whether property is situated
within or without the United States. Any election under this
paragraph shall be exercised in accordance with regulations
prescribed by the Secretary.
(2) Condition for allowance of deduction
No deduction shall be allowed under paragraph (1) for a foreign
death tax specified therein unless the decrease in the tax
imposed by section 2001 which results from the deduction provided
in paragraph (1) will inure solely for the benefit of the public,
charitable, or religious transferees described in section 2055 or
section 2106(a)(2). In any case where the tax imposed by section
2001 is equitably apportioned among all the transferees of
property included in the gross estate, including those described
in sections 2055 and 2106(a)(2) (taking into account any
exemptions, credits, or deductions allowed by this chapter), in
determining such decrease, there shall be disregarded any
decrease in the Federal estate tax which any transferees other
than those described in sections 2055 and 2106(a)(2) are required
to pay.
(3) Effect on credit for foreign death taxes of deduction under
this subsection
(A) Election
An election under this subsection shall be deemed a waiver of
the right to claim a credit, against the Federal estate tax,
under a death tax convention with any foreign country for any
tax or portion thereof in respect of which a deduction is taken
under this subsection.
(B) Cross reference
See section 2014(f) for the effect of a deduction taken under
this paragraph on the credit for foreign death taxes.
See Effective and Termination Dates of 2001 Amendment note below.
-MISC1-
AMENDMENTS
2002 - Subsec. (d)(3)(B). Pub. L. 107-134 substituted "section
2011(d)" for "section 2011(e)".
1997 - Subsec. (c)(1)(B). Pub. L. 105-34, Sec. 1073(b)(3), struck
out at end "This subparagraph shall not apply to any increase in
the tax imposed by this chapter by reason of section 4980A(d)."
Subsec. (c)(1)(D). Pub. L. 105-34, Sec. 503(b)(1), added subpar.
(D).
1988 - Subsec. (c)(1)(B). Pub. L. 100-647, inserted at end "This
subparagraph shall not apply to any increase in the tax imposed by
this chapter by reason of section 4980A(d)."
1984 - Subsec. (c)(1)(C). Pub. L. 98-369, Sec. 1027(b), added
subpar. (C).
Subsec. (e). Pub. L. 98-369, Sec. 425(a)(2), substituted "For
provisions treating certain relinquishments of marital rights as
consideration in money or money's worth, see section 2043(b)(2)"
for "For provisions that relinquishment of marital rights shall not
be deemed a consideration 'in money or money's worth,' see section
2043(b)."
1976 - Subsec. (d)(1). Pub. L. 94-455 struck out "or his
delegate" after "Secretary" in provisions preceding subpar. (A) and
following subpar. (B) and struck out "or Territory" after "a State"
in subpar. (A).
1959 - Subsec. (d). Pub. L. 86-175 inserted a reference to
foreign death taxes in heading of subsection and par. (3) and in
text of par. (2), redesignated provisions of par. (1) as par.
(1)(A) and sentence pertaining to exercise of privilege of
election, added par. (2) and sentence for determining location of
property, redesignated provisions of par. (3) as par. (3)(B) in
part, and added par. (3)(A) and the part of (B) relating to foreign
death taxes.
1958 - Subsec. (d)(1). Pub. L. 85-866 struck out "or any
possession of the United States," after "District of Columbia,".
1956 - Subsecs. (d), (e). Act Feb. 20, 1956, added subsec. (d)
and redesignated former subsec. (d) as (e).
EFFECTIVE DATE OF 2002 AMENDMENT
Amendment by Pub. L. 107-134 applicable to estates of decedents
dying on or after Sept. 11, 2001, and, in the case of individuals
dying as a result of the Apr. 19, 1995, terrorist attack, dying on
or after Apr. 19, 1995, with provisions relating to waiver of
limitations, see section 103(d) of Pub. L. 107-134, set out as a
note under section 2011 of this title.
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Amendment by Pub. L. 107-16 applicable to estates of decedents
dying, and generation-skipping transfers, after Dec. 31, 2004, see
section 532(d) of Pub. L. 107-16, set out as a note under section
2011 of this title.
Amendment by Pub. L. 107-16 inapplicable to estates of decedents
dying, gifts made, or generation skipping transfers, after Dec. 31,
2010, and the Internal Revenue Code of 1986 to be applied and
administered to such estates, gifts, and transfers as if such
amendment had never been enacted, see section 901 of Pub. L.
107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by section 503(b)(1) of Pub. L. 105-34 applicable to
estates of decedents dying after Dec. 31, 1997, with special rule
in case of estate of any decedent dying before Jan. 1, 1998, with
respect to which there is an election under section 6166 of this
title, see section 503(d) of Pub. L. 105-34, set out as a note
under section 163 of this title.
Amendment by section 1073(b)(3) of Pub. L. 105-34 applicable to
estates of decedents dying after Dec. 31, 1996, see section 1073(c)
of Pub. L. 105-34, set out as an Effective Date of Repeal note
under section 4980A of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 effective, except as otherwise
provided, as if included in the provision of the Tax Reform Act of
1986, Pub. L. 99-514, to which such amendment relates, see section
1019(a) of Pub. L. 100-647, set out as a note under section 1 of
this title.
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by section 425(a)(2) of Pub. L. 98-369 applicable to
estates of decedents dying after July 18, 1984, see section
425(c)(1) of Pub. L. 98-369, set out as a note under section 2043
of this title.
Section 1027(c) of Pub. L. 98-369 provided that: "The amendments
made by this section [amending this section and section 2056 of
this title] shall take effect as if included in the amendment made
by section 403 of the Economic Recovery Tax Act of 1981 [section
403 of Pub. L. 97-34, see Effective Date of 1981 Amendment note set
out under section 2056 of this title]."
EFFECTIVE DATE OF 1959 AMENDMENT
Section 4 of Pub. L. 86-175 provided that: "The amendments made
by the preceding sections of this Act [amending this section and
sections 2011 and 2014 of this title] shall apply with respect to
the estates of decedents dying on or after July 1, 1955."
EFFECTIVE DATE OF 1958 AMENDMENT
Amendment by Pub. L. 85-866 applicable to estates of decedents
dying after Sept. 2, 1958, see section 102(d) of Pub. L. 85-866,
set out as a note under section 2011 of this title.
EFFECTIVE DATE OF 1956 AMENDMENT
Section 4 of act Feb. 20, 1956, as amended by act Oct. 22, 1986,
Pub. L. 99-514, Sec. 2, 100 Stat. 2095, provided that: "The
amendments to the Internal Revenue Code of 1986 [formerly I.R.C.
1954] made by sections 2 and 3 of this Act [amending this section
and section 2011 of this title], and provisions having the same
effect as this amendment, which shall be considered to be included
in chapter 3 of the Internal Revenue Code of 1939, shall apply to
the estates of all decedents dying after December 31, 1953."
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 213, 303, 642, 2011,
2013, 2014, 2032A, 2043, 2057, 2106, 2622, 6166, 7481 of this
title.
-End-
-CITE-
26 USC Sec. 2054 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART IV - TAXABLE ESTATE
-HEAD-
Sec. 2054. Losses
-STATUTE-
For purposes of the tax imposed by section 2001, the value of the
taxable estate shall be determined by deducting from the value of
the gross estate losses incurred during the settlement of estates
arising from fires, storms, shipwrecks, or other casualties, or
from theft, when such losses are not compensated for by insurance
or otherwise.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 390.)
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 303, 642, 2013, 2053,
2106, 6166 of this title.
-End-
-CITE-
26 USC Sec. 2055 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART IV - TAXABLE ESTATE
-HEAD-
Sec. 2055. Transfers for public, charitable, and religious uses
-STATUTE-
(a) In general
For purposes of the tax imposed by section 2001, the value of the
taxable estate shall be determined by deducting from the value of
the gross estate the amount of all bequests, legacies, devises, or
transfers -
(1) to or for the use of the United States, any State, any
political subdivision thereof, or the District of Columbia, for
exclusively public purposes;
(2) to or for the use of any corporation organized and operated
exclusively for religious, charitable, scientific, literary, or
educational purposes, including the encouragement of art, or to
foster national or international amateur sports competition (but
only if no part of its activities involve the provision of
athletic facilities or equipment), and the prevention of cruelty
to children or animals, no part of the net earnings of which
inures to the benefit of any private stockholder or individual,
which is not disqualified for tax exemption under section
501(c)(3) by reason of attempting to influence legislation, and
which does not participate in, or intervene in (including the
publishing or distributing of statements), any political campaign
on behalf of (or in opposition to) any candidate for public
office;
(3) to a trustee or trustees, or a fraternal society, order, or
association operating under the lodge system, but only if such
contributions or gifts are to be used by such trustee or
trustees, or by such fraternal society, order, or association,
exclusively for religious, charitable, scientific, literary, or
educational purposes, or for the prevention of cruelty to
children or animals, such trust, fraternal society, order, or
association would not be disqualified for tax exemption under
section 501(c)(3) by reason of attempting to influence
legislation, and such trustee or trustees, or such fraternal
society, order, or association, does not participate in, or
intervene in (including the publishing or distributing of
statements), any political campaign on behalf of (or in
opposition to) any candidate for public office;
(4) to or for the use of any veterans' organization
incorporated by Act of Congress, or of its departments or local
chapters or posts, no part of the net earnings of which inures to
the benefit of any private shareholder or individual; or
(5) to an employee stock ownership plan if such transfer
qualifies as a qualified gratuitous transfer of qualified
employer securities within the meaning of section 664(g).
For purposes of this subsection, the complete termination before
the date prescribed for the filing of the estate tax return of a
power to consume, invade, or appropriate property for the benefit
of an individual before such power has been exercised by reason of
the death of such individual or for any other reason shall be
considered and deemed to be a qualified disclaimer with the same
full force and effect as though he had filed such qualified
disclaimer. Rules similar to the rules of section 501(j) shall
apply for purposes of paragraph (2).
(b) Powers of appointment
Property includible in the decedent's gross estate under section
2041 (relating to powers of appointment) received by a donee
described in this section shall, for purposes of this section, be
considered a bequest of such decedent.
(c) Death taxes payable out of bequests
If the tax imposed by section 2001, or any estate, succession,
legacy, or inheritance taxes, are, either by the terms of the will,
by the law of the jurisdiction under which the estate is
administered, or by the law of the jurisdiction imposing the
particular tax, payable in whole or in part out of the bequests,
legacies, or devises otherwise deductible under this section, then
the amount deductible under this section shall be the amount of
such bequests, legacies, or devises reduced by the amount of such
taxes.
(d) Limitation on deduction
The amount of the deduction under this section for any transfer
shall not exceed the value of the transferred property required to
be included in the gross estate.
(e) Disallowance of deductions in certain cases
(1) No deduction shall be allowed under this section for a
transfer to or for the use of an organization or trust described in
section 508(d) or 4948(c)(4) subject to the conditions specified in
such sections.
(2) Where an interest in property (other than an interest
described in section 170(f)(3)(B)) passes or has passed from the
decedent to a person, or for a use, described in subsection (a),
and an interest (other than an interest which is extinguished upon
the decedent's death) in the same property passes or has passed
(for less than an adequate and full consideration in money or
money's worth) from the decedent to a person, or for a use, not
described in subsection (a), no deduction shall be allowed under
this section for the interest which passes or has passed to the
person, or for the use, described in subsection (a) unless -
(A) in the case of a remainder interest, such interest is in a
trust which is a charitable remainder annuity trust or a
charitable remainder unitrust (described in section 664) or a
pooled income fund (described in section 642(c)(5)), or
(B) in the case of any other interest, such interest is in the
form of a guaranteed annuity or is a fixed percentage distributed
yearly of the fair market value of the property (to be determined
yearly).
(3) Reformations to comply with paragraph (2). -
(A) In general. - A deduction shall be allowed under subsection
(a) in respect of any qualified reformation.
(B) Qualified reformation. - For purposes of this paragraph,
the term "qualified reformation" means a change of a governing
instrument by reformation, amendment, construction, or otherwise
which changes a reformable interest into a qualified interest but
only if -
(i) any difference between -
(I) the actuarial value (determined as of the date of the
decedent's death) of the qualified interest, and
(II) the actuarial value (as so determined) of the
reformable interest,
does not exceed 5 percent of the actuarial value (as so
determined) of the reformable interest,
(ii) in the case of -
(I) a charitable remainder interest, the nonremainder
interest (before and after the qualified reformation)
terminated at the same time, or
(II) any other interest, the reformable interest and the
qualified interest are for the same period, and
(iii) such change is effective as of the date of the
decedent's death.
A nonremainder interest (before reformation) for a term of years
in excess of 20 years shall be treated as satisfying subclause
(I) of clause (ii) if such interest (after reformation) is for a
term of 20 years.
(C) Reformable interest. - For purposes of this paragraph -
(i) In general. - The term "reformable interest" means any
interest for which a deduction would be allowable under
subsection (a) at the time of the decedent's death but for
paragraph (2).
(ii) Beneficiary's interest must be fixed. - The term
"reformable interest" does not include any interest unless,
before the remainder vests in possession, all payments to
persons other than an organization described in subsection (a)
are expressed either in specified dollar amounts or a fixed
percentage of the fair market value of the property. For
purposes of determining whether all such payments are expressed
as a fixed percentage of the fair market value of the property,
section 664(d)(3) shall be taken into account.
(iii) Special rule where timely commencement of reformation.
- Clause (ii) shall not apply to any interest if a judicial
proceeding is commenced to change such interest into a
qualified interest not later than the 90th day after -
(I) if an estate tax return is required to be filed, the
last date (including extensions) for filing such return, or
(II) if no estate tax return is required to be filed, the
last date (including extensions) for filing the income tax
return for the 1st taxable year for which such a return is
required to be filed by the trust.
(iv) Special rule for will executed before january 1, 1979,
etc. - In the case of any interest passing under a will
executed before January 1, 1979, or under a trust created
before such date, clause (ii) shall not apply.
(D) Qualified interest. - For purposes of this paragraph, the
term "qualified interest" means an interest for which a deduction
is allowable under subsection (a).
(E) Limitation. - The deduction referred to in subparagraph (A)
shall not exceed the amount of the deduction which would have
been allowable for the reformable interest but for paragraph (2).
(F) Special rule where income beneficiary dies. - If (by reason
of the death of any individual, or by termination or distribution
of a trust in accordance with the terms of the trust instrument)
by the due date for filing the estate tax return (including any
extension thereof) a reformable interest is in a wholly
charitable trust or passes directly to a person or for a use
described in subsection (a), a deduction shall be allowed for
such reformable interest as if it had met the requirements of
paragraph (2) on the date of the decedent's death. For purposes
of the preceding sentence, the term "wholly charitable trust"
means a charitable trust which, upon the allowance of a
deduction, would be described in section 4947(a)(1).
(G) Statute of limitations. - The period for assessing any
deficiency of any tax attributable to the application of this
paragraph shall not expire before the date 1 year after the date
on which the Secretary is notified that such reformation (or
other proceeding pursuant to subparagraph (J) (!1) has occurred.
(H) Regulations. - The Secretary shall prescribe such
regulations as may be necessary to carry out the purposes of this
paragraph, including regulations providing such adjustments in
the application of the provisions of section 508 (relating to
special rules relating to section 501(c)(3) organizations),
subchapter J (relating to estates, trusts, beneficiaries, and
decedents), and chapter 42 (relating to private foundations) as
may be necessary by reason of the qualified reformation.
(I) Reformations permitted in case of remainder interests in
residence or farm, pooled income funds, etc. - The Secretary
shall prescribe regulations (consistent with the provisions of
this paragraph) permitting reformations in the case of any
failure -
(i) to meet the requirements of section 170(f)(3)(B)
(relating to remainder interests in personal residence or farm,
etc.), or
(ii) to meet the requirements of section 642(c)(5).
(J) Void or reformed trust in cases of insufficient remainder
interests. - In the case of a trust that would qualify (or could
be reformed to qualify pursuant to subparagraph (B)) but for
failure to satisfy the requirement of paragraph (1)(D) or (2)(D)
of section 664(d), such trust may be -
(i) declared null and void ab initio, or
(ii) changed by reformation, amendment, or otherwise to meet
such requirement by reducing the payout rate or the duration
(or both) of any noncharitable beneficiary's interest to the
extent necessary to satisfy such requirement,
pursuant to a proceeding that is commenced within the period
required in subparagraph (C)(iii). In a case described in clause
(i), no deduction shall be allowed under this title for any
transfer to the trust and any transactions entered into by the
trust prior to being declared void shall be treated as entered
into by the transferor.
(4) Works of art and their copyrights treated as separate
properties in certain cases. -
(A) In general. - In the case of a qualified contribution of a
work of art, the work of art and the copyright on such work of
art shall be treated as separate properties for purposes of
paragraph (2).
(B) Work of art defined. - For purposes of this paragraph, the
term "work of art" means any tangible personal property with
respect to which there is a copyright under Federal law.
(C) Qualified contribution defined. - For purposes of this
paragraph, the term "qualified contribution" means any transfer
of property to a qualified organization if the use of the
property by the organization is related to the purpose or
function constituting the basis for its exemption under section
501.
(D) Qualified organization defined. - For purposes of this
paragraph, the term "qualified organization" means any
organization described in section 501(c)(3) other than a private
foundation (as defined in section 509). For purposes of the
preceding sentence, a private operating foundation (as defined in
section 4942(j)(3)) shall not be treated as a private foundation.
(f) Special rule for irrevocable transfers of easements in real
property
A deduction shall be allowed under subsection (a) in respect of
any transfer of a qualified real property interest (as defined in
section 170(h)(2)(C)) which meets the requirements of section
170(h) (without regard to paragraph (4)(A) thereof).
(g) Cross references
(1) For option as to time for valuation for purpose of
deduction under this section, see section 2032.
(2) For treatment of certain organizations providing child
care, see section 501(k).
(3) For exemption of gifts and bequests to or for the benefit
of Library of Congress, see section 5 of the Act of March 3,
1925, as amended (2 U.S.C. 161).
(4) For treatment of gifts and bequests for the benefit of
the Naval Historical Center as gifts or bequests to or for the
use of the United States, see section 7222 of title 10, United
States Code.
(5) For treatment of gifts and bequests to or for the benefit
of National Park Foundation as gifts or bequests to or for the
use of the United States, see section 8 of the Act of December
18, 1967 (16 U.S.C. 191).
(6) For treatment of gifts, devises, or bequests accepted by
the Secretary of State, the Director of the International
Communication Agency, or the Director of the United States
International Development Cooperation Agency as gifts, devises,
or bequests to or for the use of the United States, see section
25 of the State Department Basic Authorities Act of 1956.
(7) For treatment of gifts or bequests of money accepted by
the Attorney General for credit to "Commissary Funds, Federal
Prisons," as gifts or bequests to or for the use of the United
States, see section 4043 of title 18, United States Code.
(8) For payment of tax on gifts and bequests of United States
obligations to the United States, see section 3113(e) of title
31, United States Code.
(9) For treatment of gifts and bequests for benefit of the
Naval Academy as gifts or bequests to or for the use of the
United States, see section 6973 of title 10, United States
Code.
(10) For treatment of gifts and bequests for benefit of the
Naval Academy Museum as gifts or bequests to or for the use of
the United States, see section 6974 of title 10, United States
Code.
(11) For exemption of gifts and bequests received by National
Archives Trust Fund Board, see section 2308 of title 44, United
States Code.
(12) For treatment of gifts and bequests to or for the use of
Indian tribal governments (or their subdivisions), see section
7871.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 390; Aug. 6, 1956, ch. 1020,
Sec. 1, 70 Stat. 1075; Pub. L. 85-866, title I, Sec. 30(d), Sept.
2, 1958, 72 Stat. 1631; Pub. L. 91-172, title II, Sec. 201(d)(1),
(4)(A), Dec. 30, 1969, 83 Stat. 560, 561; Pub. L. 91-614, title I,
Sec. 101(c), Dec. 31, 1970, 84 Stat. 1836; Pub. L. 93-483, Sec.
3(a), Oct. 26, 1974, 88 Stat. 1457; Pub. L. 94-455, title XIII,
Secs. 1304(a), 1307(d)(1)(B)(ii), (C), 1313(b)(2), title XIX, Secs.
1902(a)(4), (12)(A), 1906(b)(13)(A), title XX, Sec. 2009(b)(4)(B),
(C), title XXI, Sec. 2124(e)(2), Oct. 4, 1976, 90 Stat. 1715, 1727,
1730, 1804, 1805, 1834, 1894, 1919; Pub. L. 95-600, title V, Sec.
514(a), Nov. 6, 1978, 92 Stat. 2883; Pub. L. 96-222, title I, Sec.
105(a)(4)(A), Apr. 1, 1980, 94 Stat. 219; Pub. L. 96-465, title II,
Sec. 2206(e)(4), Oct. 17, 1980, 94 Stat. 2163; Pub. L. 96-605,
title III, Sec. 301(a), Dec. 28, 1980, 94 Stat. 3530; Pub. L.
97-34, title IV, Sec. 423(a), Aug. 13, 1981, 95 Stat. 316; Pub. L.
97-248, title II, Sec. 286(b)(2), Sept. 3, 1982, 96 Stat. 570; Pub.
L. 97-258, Sec. 3(f)(1), (2), Sept. 13, 1982, 96 Stat. 1064; Pub.
L. 97-473, title II, Sec. 202(b)(5), Jan. 14, 1983, 96 Stat. 2610;
Pub. L. 98-369, div. A, title X, Secs. 1022(a), 1032(b)(2), July
18, 1984, 98 Stat. 1026, 1033; Pub. L. 99-514, title XIV, Sec.
1422(a), Oct. 22, 1986, 100 Stat. 2716; Pub. L. 100-203, title X,
Sec. 10711(a)(3), Dec. 22, 1987, 101 Stat. 1330-464; Pub. L.
104-201, div. A, title X, Sec. 1073(b)(3), Sept. 23, 1996, 110
Stat. 2657; Pub. L. 105-34, title X, Sec. 1089(b)(3), (5), title
XV, Sec. 1530(c)(7), Aug. 5, 1997, 111 Stat. 960, 961, 1078.)
-REFTEXT-
REFERENCES IN TEXT
Section 25 of the State Department Basic Authorities Act of 1956,
referred to in subsec. (g)(6), is classified to section 2697 of
Title 22, Foreign Relations and Intercourse.
-MISC1-
AMENDMENTS
1997 - Subsec. (a)(5). Pub. L. 105-34, Sec. 1530(c)(7), added
par. (5).
Subsec. (e)(3)(G). Pub. L. 105-34, Sec. 1089(b)(5), inserted "(or
other proceeding pursuant to subparagraph (J)" after "reformation".
Subsec. (e)(3)(J). Pub. L. 105-34, Sec. 1089(b)(3), added subpar.
(J).
1996 - Subsec. (g)(4). Pub. L. 104-201 amended par. (4)
generally, substituting reference to Naval Historical Center for
reference to Office of Naval Records and History.
1987 - Subsec. (a)(2), (3). Pub. L. 100-203 inserted "(or in
opposition to)" after "on behalf of".
1986 - Subsecs. (f), (g). Pub. L. 99-514 added subsec. (f) and
redesignated former subsec. (f) as (g).
1984 - Subsec. (e)(3). Pub. L. 98-369, Sec. 1022(a), amended par.
(3) generally, substituting provisions relating to reformations to
comply with par. (2), defining "qualified reformation", "reformable
interest", and "qualified interest", and setting forth limitations
on the deduction, a special rule where the income beneficiary dies,
statute of limitations, regulations prescribed by the Secretary,
and reformations permitted in the case of remainder interests in a
residence or farm, pooled income funds, etc., for former par. (3),
which provided: "In the case of a will executed before December 31,
1978, or a trust created before such date, if a deduction is not
allowable at the time of the decedent's death because of the
failure of an interest in property which passes from the decedent
to a person, or for a use, described in subsection (a) to meet the
requirements of subparagraph (A) or (B) of paragraph (2) of this
subsection, and if the governing instrument is amended or conformed
on or before December 31, 1981, or, if later, on or before the 30th
day after the date on which judicial proceedings begun on or before
December 31, 1981, (which are required to amend or conform the
governing instrument), become final, so that the interest is in a
trust which meets the requirements of such subparagraph (A) or (B)
(as the case may be), a deduction shall nevertheless be allowed.
The Secretary may, by regulation, provide for the application of
the provisions of this paragraph to trusts whose governing
instruments are amended or conformed in accordance with this
paragraph, and such regulations may provide for any adjustments in
the application of the provisions of section 508 (relating to
special rules with respect to section 501(c)(3) organizations),
subchapter J (relating to estates, trusts, beneficiaries, and
decedents), and chapter 42 (relating to private foundations), to
such trusts made necessary by the application of this paragraph.
If, by the due date for the filing of an estate tax return
(including any extension thereof), the interest is in a charitable
trust which, upon allowance of a deduction, would be described in
section 4947(a)(1), or the interest passes directly to a person or
for a use described in subsection (a), a deduction shall be allowed
as if the governing instrument was amended or conformed under this
paragraph. If the amendment or conformation of the governing
instrument is made after the due date for the filing of the estate
tax return (including any extension thereof), the deduction shall
be allowed upon the filing of a timely claim for credit or refund
(as provided for in section 6511) of an overpayment resulting from
the application of this paragraph. In the case of a credit or
refund as a result of an amendment or conformation made pursuant to
this paragraph, no interest shall be allowed for the period prior
to the expiration of the 180th day after the date on which the
claim for credit or refund is filed."
Subsec. (f)(2). Pub. L. 98-369, Sec. 1032(b)(2), added par. (2),
and redesignated former pars. (2) to (11) as pars. (3) to (12),
respectively.
1983 - Subsec. (f)(11). Pub. L. 97-473 added par. (11).
1982 - Subsec. (a). Pub. L. 97-248 inserted provision that rules
similar to the rules of section 501(j) of this title shall apply
for purposes of par. (2).
Subsec. (f)(6). Pub. L. 97-258, Sec. 3(f)(1), substituted
"section 4043 of title 18, United States Code" for "section 2 of
the Act of May 15, 1952, as amended by the Act of July 9, 1952 (31
U.S.C. 725s-4)".
Subsec. (f)(7). Pub. L. 97-258, Sec. 3(f)(2), substituted
"section 3113(e) of title 31, United States Code" for "section 24
of the Second Liberty Bond Act (31 U.S.C. 757e)".
1981 - Subsec. (e)(4). Pub. L. 97-34 added par. (4).
1980 - Subsec. (e)(3). Pub. L. 96-605 substituted "December 31,
1978" for "December 31, 1977" and "December 31, 1981" for "December
31, 1978" in two places.
Pub. L. 96-222 substituted "such subparagraph (A) or (B)" for
"such subparagraph (a) or (B)" and "so that the interest" for "so
that interest".
Subsec. (f)(5). Pub. L. 96-465, among other changes, inserted
references to the Director of the International Communication
Agency and the Director of the United States International
Development Cooperation Agency and substituted reference to section
25 of the State Department Basic Authorities Act of 1956 for
reference to section 1021(e) of the Foreign Service Act of 1946.
1978 - Subsec. (e)(3). Pub. L. 95-600 inserted "or (B)" before
"of paragraph (2)", substituted "on or before December 31, 1978"
for "on or before December 31, 1977" wherever appearing and "which
meets the requirements of such subparagraph (a) or (B) (as the case
may be)," for "which is a charitable remainder annuity trust, a
charitable remainder unitrust (described in section 664), or a
pooled income fund (described in section 642(c)(5)),".
1976 - Subsec. (a). Pub. L. 94-455, Secs. 1307(d)(1)(B)(ii), (C),
1313(b)(2), 1902(a)(12)(A), 2009(b)(4)(B), (C), struck out
"(including the interest which falls into any such bequest, legacy,
devise, or transfer as a result of an irrevocable disclaimer of a
bequest, legacy, devise, transfer, or power, if the disclaimer is
made before the date prescribed for the filing of the estate tax
return)" after "or transfers" in provisions preceding par. (1),
struck out "Territory," after "State," in par. (1), inserted ", or
to foster national or international amateur sports competition (but
only if no part of its activities involve the provision of athletic
facilities or equipment)," after "encouragement of art" and
substituted "which is not disqualified for tax exemption under
section 501(c)(3) by reason of attempting to influence
legislation," for "no substantial part of the activities of which
is carrying on propaganda, or otherwise attempting to influence
legislation," in par. (2), substituted "such trust, fraternal
society, order, or association would not be disqualified for tax
exemption under section 501(c)(3) by reason of attempting to
influence legislation," for "no substantial part of the activities
of such trustee or trustees, or of such fraternal society, order,
or association, is carrying on propaganda, or otherwise attempting,
to influence legislation," in par. (3), and, in provisions
following par. (4), substituted "a qualified disclaimer" for "an
irrevocable disclaimer" and "such qualified disclaimer" for "such
irrevocable disclaimer".
Subsec. (b). Pub. L. 94-455, Sec. 1902(a)(4)(A), struck out
provisions under which a bequest in trust, if the surviving spouse
of the decedent was entitled for life to all of the net income from
the trust and the surviving spouse had a power of appointment over
the corpus of that trust exercisable by will in favor of, among
others, organizations described in subsec. (a)(2), could be deemed
a transfer to the organization by the decedent under certain
conditions.
Subsec. (e)(2). Pub. L. 94-455, Sec. 2124(e)(2), substituted
"(other than an interest described in section 170(f)(3)(B))" for
"(other than a remainder interest in a personal residence or farm
or an undivided portion of the decedent's entire interest in
property)" in provisions preceding subpar. (A).
Subsec. (e)(3). Pub. L. 94-455, Sec. 1304(a), Sec.
1906(b)(13)(A), substituted "will executed before December 31,
1977," for "will executed before September 21, 1974," and "amended
or conformed on or before December 31, 1977, or, if later, on or
before the 30th day after the date on which judicial proceedings
begun on or before December 31, 1977" for "amended or conformed on
or before December 31, 1975, or, if later, on or before the 30th
day after the date on which judicial proceedings begun on or before
December 31, 1975" and struck out "or his delegate" after
"Secretary".
Subsec. (f). Pub. L. 94-455, Sec. 1902(a)(4)(B), extended par.
(2) by inserting reference to gifts, struck out par. (3) which made
a cross reference to section 2 of the Act of Aug. 8, 1946 (60 Stat.
924; 5 U.S.C. 393) for construction of bequests for benefit of the
library of the Post Office Department as bequests to or for the use
of the United States, redesignated pars. (4)-(11) as (3)-(10),
respectively, substituted "For treatment of gifts and bequests for
the benefit of the Office of Naval Records and History as gifts or
bequests to or for the use of the United States, see section 7222
of title 10, United States Code" for "For exemption of bequests for
benefit of Office of Naval Records and Library, Navy Department,
see section 2 of the Act of March 4, 1937 (50 Stat. 25; 5 U.S.C.
419b)" in par. (3) as so redesignated, substituted "For treatment
of gifts and bequests to or for the benefit of National Park
Foundation as gifts or bequests to or for the use of the United
States, see section 8 of the Act of December 18, 1967 (16 U.S.C.
191)" for "For exemption of bequests to or for benefit of National
Park Service, see section 5 of the Act of July 10, 1935 (49 Stat.
478; 16 U.S.C. 19c)" in par. (4) as so redesignated, and corrected
obsolete and inaccurate references in pars. (5)-(10) as so
redesignated.
1974 - Subsec. (e)(3). Pub. L. 93-483 added par. (3).
1970 - Subsec. (b)(2)(C). Pub. L. 91-614 substituted "6 months"
for "one year".
1969 - Subsec. (a)(2). Pub. L. 91-172, Sec. 201(d)(4)(A) (i),
inserted non-participation and non-intervention in political
campaigns as an additional qualification.
Subsec. (a)(3). Pub. L. 91-172, Sec. 201(d)(4)(A)(ii), inserted
non-participation and non-intervention in political campaigns as an
additional qualification.
Subsec. (e). Pub. L. 91-172, Sec. 201(d)(1), substituted
substantive provisions for simple reference to sections 503 and 681
of this title in which such substantive provisions were formerly
set out.
1958 - Subsec. (e). Pub. L. 85-866 substituted "503" for "504".
1956 - Subsec. (b). Act Aug. 6, 1956, designated existing
provisions as par. (1) and added par. (2).
-CHANGE-
CHANGE OF NAME
International Communication Agency, and Director thereof,
redesignated United States Information Agency, and Director
thereof, by section 303 of Pub. L. 97-241, title III, Aug. 24,
1982, 96 Stat. 291, set out as a note under section 1461 of Title
22, Foreign Relations and Intercourse. United States Information
Agency (other than Broadcasting Board of Governors and
International Broadcasting Bureau) abolished and functions
transferred to Secretary of State, see sections 6531 and 6532 of
Title 22.
-MISC2-
EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by section 1089(b)(3), (5) of Pub. L. 105-34 applicable
to transfers in trust after July 28, 1997, with special rule for
certain decedents, see section 1089(b)(6) of Pub. L. 105-34, set
out as a note under section 664 of this title.
Amendment by section 1530(c)(7) of Pub. L. 105-34 applicable to
transfers made by trusts to, or for the use of, an employee stock
ownership plan after Aug. 5, 1997, see section 1530(d) of Pub. L.
105-34, set out as a note under section 401 of this title.
EFFECTIVE DATE OF 1987 AMENDMENT
Amendment by Pub. L. 100-203 applicable with respect to
activities after Dec. 22, 1987, see section 10711(c) of Pub. L.
100-203, set out as a note under section 170 of this title.
EFFECTIVE DATE OF 1986 AMENDMENT
Section 1422(e) of Pub. L. 99-514 provided that: "The amendments
made by this section [amending this section and sections 2106 and
2522 of this title] shall apply to transfers and contributions made
after December 31, 1986."
EFFECTIVE DATE OF 1984 AMENDMENT
Section 1022(e) of Pub. L. 98-369, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
"(1) Subsections (a), (b), and (c). - The amendments made by
subsections (a), (b), and (c) [amending this section and sections
170 and 2522 of this title] shall apply to reformations after
December 31, 1978; except that such amendments shall not apply to
any reformation to which section 2055(e)(3) of the Internal Revenue
Code of 1986 [formerly I.R.C. 1954] (as in effect on the day before
the date of the enactment of this Act [July 18, 1984]) applies. For
purposes of applying clause (iii) of section 2055(e)(3)(C) of such
Code (as amended by this section), the 90th day described in such
clause shall be treated as not occurring before the 90th day after
the date of the enactment of this Act.
"(2) Subsection (d). - The amendment made by subsection (d)
[amending section 664 of this title] shall apply to transfers after
December 31, 1978.
"(3) Statute of limitations. -
"(A) In general. - If on the date of the enactment of this Act
[July 18, 1984] (or at any time before the date 1 year after such
date of enactment), credit or refund of any overpayment of tax
attributable to the amendments made by this section is barred by
any law or rule of law, such credit or refund of such overpayment
may nevertheless be made if claim therefor is filed before the
date 1 year after the date of the enactment of this Act.
"(B) No interest where statute closed on date of enactment. -
In any case where the making of the credit or refund of the
overpayment described in subparagraph (A) is barred on the date
of the enactment of this Act [July 18, 1984], no interest shall
be allowed with respect to such overpayment (or any related
adjustment) for the period before the date 180 days after the
date on which the Secretary of the Treasury (or his delegate) is
notified that the reformation has occurred."
Amendment by section 1032(b)(2) of Pub. L. 98-369 applicable to
taxable years beginning after July 18, 1984, see section 1032(c) of
Pub. L. 98-369, set out as a note under section 170 of this title.
EFFECTIVE DATE OF 1983 AMENDMENT
For effective date of amendment by Pub. L. 97-473, see section
204(3) of Pub. L. 97-473, set out as an Effective Date note under
section 7871 of this title.
EFFECTIVE DATE OF 1982 AMENDMENT
Amendment by Pub. L. 97-248 effective Oct. 5, 1976, see section
286(c) of Pub. L. 97-248, set out as a note under section 501 of
this title.
EFFECTIVE DATE OF 1981 AMENDMENT
Section 423(c)(1) of Pub. L. 97-34 provided that: "The amendment
made by subsection (a) [amending this section] shall apply to the
estates of decedents dying after December 31, 1981."
EFFECTIVE DATE OF 1980 AMENDMENTS
Section 301(b)(1) of Pub. L. 96-605 provided that: "The amendment
made by subsection (a) [amending this section] shall apply in the
case of decedents dying after December 31, 1969."
Amendment by Pub. L. 96-465 effective Feb. 15, 1981, except as
otherwise provided, see section 2403 of Pub. L. 96-465, set out as
an Effective Date note under section 3901 of Title 22, Foreign
Relations and Intercourse.
Amendment by Pub. L. 96-222 effective, except as otherwise
provided, as if it had been included in the provisions of the
Revenue Act of 1978, Pub. L. 95-600, to which such amendment
relates, see section 201 of Pub. L. 96-222, set out as a note under
section 32 of this title.
EXTENSION OF 1978 AMENDMENT; CHARITABLE LEAD TRUSTS AND CHARITABLE
REMAINDER TRUSTS IN CASE OF INCOME AND GIFT TAXES
Section 301(b)(2) of Pub. L. 96-605 provided that: "Section
514(b) [section 514(b) of Pub. L. 95-600, set out below] (and
section 514(c) [section 514(c) of Pub. L. 95-600, set out below]
insofar as it relates to section 514(b)) of the Revenue Act of 1978
shall be applied as if the amendment made by subsection (a)
[amending this section] had been included in the amendment made by
section 514(a) of such Act [section 514(a) of Pub. L. 95-600,
amending this section]."
EFFECTIVE DATE OF 1978 AMENDMENT; CHARITABLE LEAD TRUSTS AND
CHARITABLE REMAINDER TRUSTS IN CASE OF INCOME AND GIFT TAXES
Section 514(c) of Pub. L. 95-600, as added by Pub. L. 96-222,
title I, Sec. 105(a)(4)(B), Apr. 1, 1980, 94 Stat. 219; amended
Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided
that:
"(1) For subsection (a). - The amendment made by subsection (a)
[amending this section] shall apply in the case of decedents dying
after December 31, 1969.
"(2) For subsection (b). - Subsection (b) [section 514(b) of Pub.
L. 95-600, set out below] -
"(A) insofar as it relates to section 170 of the Internal
Revenue Code of 1986 [formerly I.R.C. 1954] shall apply to
transfers in trust and contributions made after July 31, 1969,
and
"(B) insofar as it relates to section 2522 of the Internal
Revenue Code of 1986 shall apply to transfers made after December
31, 1969."
EFFECTIVE DATE OF 1976 AMENDMENT
Section 1304(c) of Pub. L. 94-455 provided that: "The amendments
made by this section [amending this section] shall apply in the
case of decedents dying after December 31, 1969."
Amendment by section 1307(d)(1)(B)(ii), (C) of Pub. L. 94-455,
applicable to estates of decedents dying after Dec. 31, 1976, see
section 1307(e) of Pub. L. 94-455, set out as a note under section
501 of this title.
Amendment by section 1313(b)(2) of Pub. L. 94-455 applicable on
day following Oct. 4, 1976, see section 1313(d) of Pub. L. 94-455,
set out as a note under section 501 of this title.
Amendment by section 1902(a)(4) of Pub. L. 94-455 applicable in
the case of estates of decedents dying after Oct. 4, 1976, see
section 1902(c)(1) of Pub. L. 94-455, set out as a note under
section 2011 of this title.
Amendment by section 1902(a)(12)(A) of Pub. L. 94-455 applicable
with respect to gifts made after Dec. 31, 1976, see section
1902(c)(2) of Pub. L. 94-455, set out as a note under section 2501
of this title.
Amendment by section 2009(b)(4)(B), (C) of Pub. L. 94-455
applicable with respect to transfers creating an interest in person
disclaiming made after Dec. 31, 1976, see section 2009(e)(2) of
Pub. L. 94-455, set out as a note under section 2518 of this title.
Amendment by section 2124(e)(2) of Pub. L. 94-455 applicable with
respect to contributions or transfers made after June 13, 1976, see
section 2124(e)(4) of Pub. L. 94-455, set out as a note under
section 170 of this title.
EFFECTIVE DATE OF 1974 AMENDMENT
Section 3(b) of Pub. L. 93-483 provided that: "The amendment made
by subsection (a) [amending this section] shall apply with respect
to estates of decedents dying after December 31, 1969."
EFFECTIVE DATE OF 1970 AMENDMENT
Amendment by Pub. L. 91-614 applicable with respect to decedents
dying after Dec. 31, 1970, see section 101(j) of Pub. L. 91-614,
set out as an Effective Date note under section 2032 of this title.
EFFECTIVE DATE OF 1969 AMENDMENT
Amendment by section 201(d)(1) of Pub. L. 91-172 applicable in
the case of decedents dying after Dec. 31, 1969, with specified
exceptions, see section 201(g)(4) of Pub. L. 91-172, set out as a
note under section 170 of this title.
Amendment by section 201(d)(4)(A) of Pub. L. 91-172 applicable to
gifts and transfers made after Dec. 31, 1969, see section
201(g)(4)(E) of Pub. L. 91-172, set out as a note under section 170
of this title.
EFFECTIVE DATE OF 1956 AMENDMENT
Section 3 of act Aug. 6, 1956, provided that: "The amendments
made by this Act [amending this section and section 6503 of this
title] shall apply in the case of decedents dying after August 16,
1954."
-TRANS-
TRANSFER OF FUNCTIONS
United States International Development Cooperation Agency (other
than Agency for International Development and Overseas Private
Investment Corporation) abolished and functions and authorities
transferred, see sections 6561 and 6562 of Title 22, Foreign
Relations and Intercourse.
-MISC3-
SPECIAL DONATIONS
Section 1422(d) of Pub. L. 99-514 provided that: "If the
Secretary of the Interior acquires by donation after December 31,
1986, a conservation easement (within the meaning of section 2(h)
of S. 720, 99th Congress, 1st Session, as in effect on August 16,
1986) [see Pub. L. 99-420, Sept. 25, 1986, Sec. 102(h), 99 Stat.
955, 957], such donation shall qualify for treatment under section
2055(f) or 2522(d) of the Internal Revenue Code of 1954 [now 1986],
as added by this section."
CHARITABLE LEAD TRUSTS AND CHARITABLE REMAINDER TRUSTS IN CASE OF
INCOME AND GIFT TAXES
Section 514(b) of Pub. L. 95-600, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: "Under
regulations prescribed by the Secretary of the Treasury or his
delegate, in the case of trusts created before December 31, 1977,
provisions comparable to section 2055(e)(3) of the Internal Revenue
Code of 1986 [formerly I.R.C. 1954] (as amended by subsection (a))
shall be deemed to be included in sections 170 and 2522 of the
Internal Revenue Code of 1986."
EXTENSION OF PERIOD FOR FILING CLAIM FOR REFUND
Section 1304(b) of Pub. L. 94-455, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: "A claim for
refund or credit of an overpayment of the tax imposed by section
2001 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]
allowable under section 2055(e)(3) of such Code (as amended by
subsection (a)) shall not be denied because of the expiration of
the time for filing such a claim under section 6511(a) if such
claim is filed not later than June 30, 1978."
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 170, 501, 508, 2011,
2012, 2013, 2014, 2031, 2032, 2053, 2056A, 2106, 2522, 2642, 2652,
4947, 4948, 7871 of this title; title 12 section 3051; title 15
section 80a-3; title 22 section 3307.
-FOOTNOTE-
(!1) So in original. Probably should be followed by an additional
closing parenthesis.
-End-
-CITE-
26 USC Sec. 2056 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART IV - TAXABLE ESTATE
-HEAD-
Sec. 2056. Bequests, etc., to surviving spouse
-STATUTE-
(a) Allowance of marital deduction
For purposes of the tax imposed by section 2001, the value of the
taxable estate shall, except as limited by subsection (b), be
determined by deducting from the value of the gross estate an
amount equal to the value of any interest in property which passes
or has passed from the decedent to his surviving spouse, but only
to the extent that such interest is included in determining the
value of the gross estate.
(b) Limitation in the case of life estate or other terminable
interest
(1) General rule
Where, on the lapse of time, on the occurrence of an event or
contingency, or on the failure of an event or contingency to
occur, an interest passing to the surviving spouse will terminate
or fail, no deduction shall be allowed under this section with
respect to such interest -
(A) if an interest in such property passes or has passed (for
less than an adequate and full consideration in money or
money's worth) from the decedent to any person other than such
surviving spouse (or the estate of such spouse); and
(B) if by reason of such passing such person (or his heirs or
assigns) may possess or enjoy any part of such property after
such termination or failure of the interest so passing to the
surviving spouse;
and no deduction shall be allowed with respect to such interest
(even if such deduction is not disallowed under subparagraphs (A)
and (B)) -
(C) if such interest is to be acquired for the surviving
spouse, pursuant to directions of the decedent, by his executor
or by the trustee of a trust.
For purposes of this paragraph, an interest shall not be
considered as an interest which will terminate or fail merely
because it is the ownership of a bond, note, or similar
contractual obligation, the discharge of which would not have the
effect of an annuity for life or for a term.
(2) Interest in unidentified assets
Where the assets (included in the decedent's gross estate) out
of which, or the proceeds of which, an interest passing to the
surviving spouse may be satisfied include a particular asset or
assets with respect to which no deduction would be allowed if
such asset or assets passed from the decedent to such spouse,
then the value of such interest passing to such spouse shall, for
purposes of subsection (a), be reduced by the aggregate value of
such particular assets.
(3) Interest of spouse conditional on survival for limited period
For purposes of this subsection, an interest passing to the
surviving spouse shall not be considered as an interest which
will terminate or fail on the death of such spouse if -
(A) such death will cause a termination or failure of such
interest only if it occurs within a period not exceeding 6
months after the decedent's death, or only if it occurs as a
result of a common disaster resulting in the death of the
decedent and the surviving spouse, or only if it occurs in the
case of either such event; and
(B) such termination or failure does not in fact occur.
(4) Valuation of interest passing to surviving spouse
In determining for purposes of subsection (a) the value of any
interest in property passing to the surviving spouse for which a
deduction is allowed by this section -
(A) there shall be taken into account the effect which the
tax imposed by section 2001, or any estate, succession, legacy,
or inheritance tax, has on the net value to the surviving
spouse of such interest; and
(B) where such interest or property is encumbered in any
manner, or where the surviving spouse incurs any obligation
imposed by the decedent with respect to the passing of such
interest, such encumbrance or obligation shall be taken into
account in the same manner as if the amount of a gift to such
spouse of such interest were being determined.
(5) Life estate with power of appointment in surviving spouse
In the case of an interest in property passing from the
decedent, if his surviving spouse is entitled for life to all the
income from the entire interest, or all the income from a
specific portion thereof, payable annually or at more frequent
intervals, with power in the surviving spouse to appoint the
entire interest, or such specific portion (exercisable in favor
of such surviving spouse, or of the estate of such surviving
spouse, or in favor of either, whether or not in each case the
power is exercisable in favor of others), and with no power in
any other person to appoint any part of the interest, or such
specific portion, to any person other than the surviving spouse -
(A) the interest or such portion thereof so passing shall,
for purposes of subsection (a), be considered as passing to the
surviving spouse, and
(B) no part of the interest so passing shall, for purposes of
paragraph (1)(A), be considered as passing to any person other
than the surviving spouse.
This paragraph shall apply only if such power in the surviving
spouse to appoint the entire interest, or such specific portion
thereof, whether exercisable by will or during life, is
exercisable by such spouse alone and in all events.
(6) Life insurance or annuity payments with power of appointment
in surviving spouse
In the case of an interest in property passing from the
decedent consisting of proceeds under a life insurance,
endowment, or annuity contract, if under the terms of the
contract such proceeds are payable in installments or are held by
the insurer subject to an agreement to pay interest thereon
(whether the proceeds, on the termination of any interest
payments, are payable in a lump sum or in annual or more frequent
installments), and such installment or interest payments are
payable annually or at more frequent intervals, commencing not
later than 13 months after the decedent's death, and all amounts,
or a specific portion of all such amounts, payable during the
life of the surviving spouse are payable only to such spouse, and
such spouse has the power to appoint all amounts, or such
specific portion, payable under such contract (exercisable in
favor of such surviving spouse, or of the estate of such
surviving spouse, or in favor of either, whether or not in each
case the power is exercisable in favor of others), with no power
in any other person to appoint such amounts to any person other
than the surviving spouse -
(A) such amounts shall, for purposes of subsection (a), be
considered as passing to the surviving spouse, and
(B) no part of such amounts shall, for purposes of paragraph
(1)(A), be considered as passing to any person other than the
surviving spouse.
This paragraph shall apply only if, under the terms of the
contract, such power in the surviving spouse to appoint such
amounts, whether exercisable by will or during life, is
exercisable by such spouse alone and in all events.
(7) Election with respect to life estate for surviving spouse
(A) In general
In the case of qualified terminable interest property -
(i) for purposes of subsection (a), such property shall be
treated as passing to the surviving spouse, and
(ii) for purposes of paragraph (1)(A), no part of such
property shall be treated as passing to any person other than
the surviving spouse.
(B) Qualified terminable interest property defined
For purposes of this paragraph -
(i) In general
The term "qualified terminable interest property" means
property -
(I) which passes from the decedent,
(II) in which the surviving spouse has a qualifying
income interest for life, and
(III) to which an election under this paragraph applies.
(ii) Qualifying income interest for life
The surviving spouse has a qualifying income interest for
life if -
(I) the surviving spouse is entitled to all the income
from the property, payable annually or at more frequent
intervals, or has a usufruct interest for life in the
property, and
(II) no person has a power to appoint any part of the
property to any person other than the surviving spouse.
Subclause (II) shall not apply to a power exercisable only at
or after the death of the surviving spouse. To the extent
provided in regulations, an annuity shall be treated in a
manner similar to an income interest in property (regardless
of whether the property from which the annuity is payable can
be separately identified).
(iii) Property includes interest therein
The term "property" includes an interest in property.
(iv) Specific portion treated as separate property
A specific portion of property shall be treated as separate
property.
(v) Election
An election under this paragraph with respect to any
property shall be made by the executor on the return of tax
imposed by section 2001. Such an election, once made, shall
be irrevocable.
(C) Treatment of survivor annuities
In the case of an annuity included in the gross estate of the
decedent under section 2039 (or, in the case of an interest in
an annuity arising under the community property laws of a
State, included in the gross estate of the decedent under
section 2033) where only the surviving spouse has the right to
receive payments before the death of such surviving spouse -
(i) the interest of such surviving spouse shall be treated
as a qualifying income interest for life, and
(ii) the executor shall be treated as having made an
election under this subsection with respect to such annuity
unless the executor otherwise elects on the return of tax
imposed by section 2001.
An election under clause (ii), once made, shall be irrevocable.
(8) Special rule for charitable remainder trusts
(A) In general
If the surviving spouse of the decedent is the only
beneficiary of a qualified charitable remainder trust who is
not a charitable beneficiary nor an ESOP beneficiary, paragraph
(1) shall not apply to any interest in such trust which passes
or has passed from the decedent to such surviving spouse.
(B) Definitions
For purposes of subparagraph (A) -
(i) Charitable beneficiary
The term "charitable beneficiary" means any beneficiary
which is an organization described in section 170(c).
(ii) ESOP beneficiary
The term "ESOP beneficiary" means any beneficiary which is
an employee stock ownership plan (as defined in section
4975(e)(7)) that holds a remainder interest in qualified
employer securities (as defined in section 664(g)(4)) to be
transferred to such plan in a qualified gratuitous transfer
(as defined in section 664(g)(1)).
(iii) Qualified charitable remainder trust
The term "qualified charitable remainder trust" means a
charitable remainder annuity trust or a charitable remainder
unitrust (described in section 664).
(9) Denial of double deduction
Nothing in this section or any other provision of this chapter
shall allow the value of any interest in property to be deducted
under this chapter more than once with respect to the same
decedent.
(10) Specific portion
For purposes of paragraphs (5), (6), and (7)(B)(iv), the term
"specific portion" only includes a portion determined on a
fractional or percentage basis.
(c) Definition
For purposes of this section, an interest in property shall be
considered as passing from the decedent to any person if and only
if -
(1) such interest is bequeathed or devised to such person by
the decedent;
(2) such interest is inherited by such person from the
decedent;
(3) such interest is the dower or curtesy interest (or
statutory interest in lieu thereof) of such person as surviving
spouse of the decedent;
(4) such interest has been transferred to such person by the
decedent at any time;
(5) such interest was, at the time of the decedent's death,
held by such person and the decedent (or by them and any other
person) in joint ownership with right of survivorship;
(6) the decedent had a power (either alone or in conjunction
with any person) to appoint such interest and if he appoints or
has appointed such interest to such person, or if such person
takes such interest in default on the release or nonexercise of
such power; or
(7) such interest consists of proceeds of insurance on the life
of the decedent receivable by such person.
Except as provided in paragraph (5) or (6) of subsection (b), where
at the time of the decedent's death it is not possible to ascertain
the particular person or persons to whom an interest in property
may pass from the decedent, such interest shall, for purposes of
subparagraphs (A) and (B) of subsection (b)(1), be considered as
passing from the decedent to a person other than the surviving
spouse.
(d) Disallowance of marital deduction where surviving spouse not
United States citizen
(1) In general
Except as provided in paragraph (2), if the surviving spouse of
the decedent is not a citizen of the United States -
(A) no deduction shall be allowed under subsection (a), and
(B) section 2040(b) shall not apply.
(2) Marital deduction allowed for certain transfers in trust
(A) In general
Paragraph (1) shall not apply to any property passing to the
surviving spouse in a qualified domestic trust.
(B) Special rule
If any property passes from the decedent to the surviving
spouse of the decedent, for purposes of subparagraph (A), such
property shall be treated as passing to such spouse in a
qualified domestic trust if -
(i) such property is transferred to such a trust before the
date on which the return of the tax imposed by this chapter
is made, or
(ii) such property is irrevocably assigned to such a trust
under an irrevocable assignment made on or before such date
which is enforceable under local law.
(3) Allowance of credit to certain spouses
If -
(A) property passes to the surviving spouse of the decedent
(hereinafter in this paragraph referred to as the "first
decedent"),
(B) without regard to this subsection, a deduction would be
allowable under subsection (a) with respect to such property,
and
(C) such surviving spouse dies and the estate of such
surviving spouse is subject to the tax imposed by this chapter,
the Federal estate tax paid (or treated as paid under section
2056A(b)(7)) by the first decedent with respect to such property
shall be allowed as a credit under section 2013 to the estate of
such surviving spouse and the amount of such credit shall be
determined under such section without regard to when the first
decedent died and without regard to subsection (d)(3) of such
section.
(4) Special rule where resident spouse becomes citizen
Paragraph (1) shall not apply if -
(A) the surviving spouse of the decedent becomes a citizen of
the United States before the day on which the return of the tax
imposed by this chapter is made, and
(B) such spouse was a resident of the United States at all
times after the date of the death of the decedent and before
becoming a citizen of the United States.
(5) Reformations permitted
(A) In general
In the case of any property with respect to which a deduction
would be allowable under subsection (a) but for this
subsection, the determination of whether a trust is a qualified
domestic trust shall be made -
(i) as of the date on which the return of the tax imposed
by this chapter is made, or
(ii) if a judicial proceeding is commenced on or before the
due date (determined with regard to extensions) for filing
such return to change such trust into a trust which is a
qualified domestic trust, as of the time when the changes
pursuant to such proceeding are made.
(B) Statute of limitations
If a judicial proceeding described in subparagraph (A)(ii) is
commenced with respect to any trust, the period for assessing
any deficiency of tax attributable to any failure of such trust
to be a qualified domestic trust shall not expire before the
date 1 year after the date on which the Secretary is notified
that the trust has been changed pursuant to such judicial
proceeding or that such proceeding has been terminated.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 392; Pub. L. 89-621, Sec. 1(a),
Oct. 4, 1966, 80 Stat. 872; Pub. L. 94-455, title XIX, Sec.
1902(a)(12)(A), title XX, Secs. 2002(a), 2009(b)(4)(D), (E), Oct.
4, 1976, 90 Stat. 1805, 1854, 1894; Pub. L. 95-600, title VII, Sec.
702(g)(1), (2), Nov. 6, 1978, 92 Stat. 2930; Pub. L. 97-34, title
IV, Sec. 403(a)(1), (d)(1), Aug. 13, 1981, 95 Stat. 301, 302; Pub.
L. 97-448, title I, Sec. 104(a)(2)(A), (8), Jan. 12, 1983, 96 Stat.
2380, 2381; Pub. L. 98-369, div. A, title X, Sec. 1027(a), July 18,
1984, 98 Stat. 1031; Pub. L. 100-647, title V, Sec. 5033(a)(1),
title VI, Sec. 6152(a), Nov. 10, 1988, 102 Stat. 3670, 3725; Pub.
L. 101-239, title VII, Sec. 7815(d)(4)(A), (5), (6), (8), 7816(q),
Dec. 19, 1989, 103 Stat. 2415, 2416, 2423; Pub. L. 101-508, title
XI, Secs. 11701(l)(1), 11702(g)(5), Nov. 5, 1990, 104 Stat.
1388-513, 1388-516; Pub. L. 102-486, title XIX, Sec. 1941(a), Oct.
24, 1992, 106 Stat. 3036; Pub. L. 105-34, title XIII, Sec. 1311(a),
title XV, Sec. 1530(c)(8), Aug. 5, 1997, 111 Stat. 1044, 1078.)
-MISC1-
AMENDMENTS
1997 - Subsec. (b)(7)(C). Pub. L. 105-34, Sec. 1311(a), inserted
"(or, in the case of an interest in an annuity arising under the
community property laws of a State, included in the gross estate of
the decedent under section 2033)" after "section 2039".
Subsec. (b)(8). Pub. L. 105-34, Sec. 1530(c)(8), amended par. (8)
generally. Prior to amendment, par. (8) read as follows:
"(8) Special rule for charitable remainder trusts. -
"(A) In general. - If the surviving spouse of the decedent is
the only noncharitable beneficiary of a qualified charitable
remainder trust, paragraph (1) shall not apply to any interest in
such trust which passes or has passed from the decedent to such
surviving spouse.
"(B) Definitions. - For purposes of subparagraph (A) -
"(i) Noncharitable beneficiary. - The term 'noncharitable
beneficiary' means any beneficiary of the qualified charitable
remainder trust other than an organization described in section
170(c).
"(ii) Qualified charitable remainder trust. - The term
'qualified charitable remainder trust' means a charitable
remainder annuity trust or charitable remainder unitrust
(described in section 664)."
1992 - Subsec. (b)(10). Pub. L. 102-486 added par. (10).
1990 - Subsec. (d)(3). Pub. L. 101-508, Sec. 11702(g)(5),
substituted "section 2056A(b)(7)" for "section 2056A(b)(6)".
Subsec. (d)(4), (5). Pub. L. 101-508, Sec. 11701(l)(1),
redesignated par. (4) relating to reformations permitted as par.
(5).
1989 - Subsec. (b)(7)(C). Pub. L. 101-239, Sec. 7816(q), inserted
"included in the gross estate of the decedent under section 2039"
after "an annuity".
Subsec. (d)(2)(B). Pub. L. 101-239, Sec. 7815(d)(4)(A),
substituted "Special rule" for "Property passing outside of probate
estate" in heading and amended text generally. Prior to amendment,
text read as follows: "If any property passes from the decedent to
the surviving spouse of the decedent outside of the decedent's
probate estate, for purposes of subparagraph (A), such property
shall be treated as passing to such spouse in a qualified domestic
trust if such property is transferred to such a trust before the
day on which the return of the tax imposed by section 2001 is
made."
Subsec. (d)(3). Pub. L. 101-239, Sec. 7815(d)(6), substituted
"this chapter" for "section 2001" in subpar. (C) and inserted "and
without regard to subsection (d)(3) of such section" after "first
decedent died" in concluding provisions.
Subsec. (d)(4). Pub. L. 101-239, Sec. 7815(d)(8), added par. (4)
relating to reformations permitted.
Pub. L. 101-239, Sec. 7815(d)(5), added par. (4) relating to
special rule where resident spouse becomes citizen.
1988 - Subsec. (b)(7)(C). Pub. L. 100-647, Sec. 6152(a), added
subpar. (C).
Subsec. (d). Pub. L. 100-647, Sec. 5033(a)(1), added subsec. (d).
1984 - Subsec. (b)(7)(B)(ii)(I). Pub. L. 98-369 inserted ", or
has a usufruct interest for life in the property".
1983 - Subsec. (b)(7)(B)(ii). Pub. L. 97-448, Sec. 104(a)(8),
inserted provision that an annuity shall be treated in a manner
similar to an income interest in property (regardless of whether
the property from which the annuity is payable can be separately
identified).
Subsec. (b)(9). Pub. L. 97-448, Sec. 104(a)(2)(A), added par.
(9).
1981 - Subsec. (a). Pub. L. 97-34, Sec. 403(a)(1)(B), substituted
"subsection (b)" for "subsections (b) and (c)".
Subsec. (b)(7), (8). Pub. L. 97-34, Sec. 403(d)(1), added pars.
(7) and (8).
Subsecs. (c), (d). Pub. L. 97-34, Sec. 403(a)(1)(A), redesignated
subsec. (d) as (c) and struck out former subsec. (c) relating to
limitation on aggregate of deductions.
1978 - Subsec. (c)(1)(B). Pub. L. 95-600 inserted in cl. (ii)
"required to be included in a gift tax return" after "with respect
to any gift" and inserted following cl. (ii) "For purposes of this
subparagraph, a gift which is includible in the gross estate of the
donor by reason of section 2035 shall not be taken into account".
1976 - Subsec. (a). Pub. L. 94-455, Sec. 2009(b)(4)(E),
substituted "subsections (b) and (c)" for "subsections (b), (c),
and (d)".
Subsec. (c)(1). Pub. L. 94-455, Sec. 2002(a), designated existing
provisions as subpar. (A), substituted provisions that the
aggregate amount of the deductions allowed under this section
(computed without regard to this subsection) shall not exceed the
greater of $250,000 or 50 percent of the value of the adjusted
gross estate as defined in par. (2) for provisions that the
aggregate amount of the deductions allowed under this section
(computed without regard to this subsection) shall not exceed 50
percent of the value of the adjusted gross estate as defined in
par. (2), and added subpars. (B) and (C).
Subsec. (c)(2)(B). Pub. L. 94-455, Sec. 1902(a)(12)(A), struck
out "Territory," after "State," in provisions preceding cl. (i).
Subsecs. (d), (e). Pub. L. 94-455, Sec. 2009(b)(4)(D),
redesignated subsec. (e) as (d). Former subsec. (d), which related
to disclaimers by the surviving spouse or by other persons, was
struck out.
1966 - Subsec. (d)(2). Pub. L. 89-621 provided that if the
disclaimer is made by the person before the date prescribed for the
filing of the estate tax return and if the person does not accept
the interest before making the disclaimer, the interest shall, for
purposes of this section, be considered as passing from the
decedent to the surviving spouse.
EFFECTIVE DATE OF 1997 AMENDMENT
Section 1311(b) of Pub. L. 105-34 provided that: "The amendment
made by this section [amending this section] shall apply to estates
of decedents dying after the date of the enactment of this Act
[Aug. 5, 1997]."
Amendment by section 1530(c)(8) of Pub. L. 105-34 applicable to
transfers made by trusts to, or for the use of, an employee stock
ownership plan after Aug. 5, 1997, see section 1530(d) of Pub. L.
105-34, set out as a note under section 401 of this title.
EFFECTIVE DATE OF 1992 AMENDMENT
Section 1941(c) of Pub. L. 102-486 provided that:
"(1) Subsection (a). -
"(A) In general. - Except as provided in subparagraph (B), the
amendment made by subsection (a) [amending this section] shall
apply to the estates of decedents dying after the date of the
enactment of this Act [Oct. 24, 1992].
"(B) Exception. - The amendment made by subsection (a) shall
not apply to any interest in property which passes (or has
passed) to the surviving spouse of the decedent pursuant to a
will (or revocable trust) in existence on the date of the
enactment of this Act if -
"(i) the decedent dies on or before the date 3 years after
such date of enactment, or
"(ii) the decedent was, on such date of enactment, under a
mental disability to change the disposition of his property and
did not regain his competence to dispose of such property
before the date of his death.
The preceding sentence shall not apply if such will (or revocable
trust) is amended at any time after such date of enactment in any
respect which will increase the amount of the interest which so
passes or alters the terms of the transfer by which the interest
so passes.
"(2) Subsection (b). - The amendments made by subsection (b)
[amending section 2523 of this title] shall apply to gifts made
after the date of the enactment of this Act [Oct. 24, 1992]."
EFFECTIVE DATE OF 1990 AMENDMENT
Amendment by section 11701(l)(1) of Pub. L. 101-508 effective,
except as otherwise provided, as if included in the provision of
the Revenue Reconciliation Act of 1989, Pub. L. 101-239, title VII,
to which such amendment relates, see section 11701(n) of Pub. L.
101-508, set out as a note under section 42 of this title.
Amendment by section 11702(g)(5) of Pub. L. 101-508 effective as
if included in the provision of the Technical and Miscellaneous
Revenue Act of 1988, Pub. L. 100-647, to which such amendment
relates, see section 11702(j) of Pub. L. 101-508, set out as a note
under section 59 of this title.
EFFECTIVE DATE OF 1989 AMENDMENT
Section 7815(d)(4)(B) of Pub. L. 101-239 provided that: "In the
case of the estate of a decedent dying before the date of the
enactment of this Act [Dec. 19, 1989], the period during which the
transfer (or irrevocable assignment) referred to in section
2056(d)(2)(B) of the Internal Revenue Code of 1986 (as amended by
subparagraph (A)) may be made shall not expire before the date 1
year after such date of enactment."
Amendment by Pub. L. 101-239 effective, except as otherwise
provided, as if included in the provision of the Technical and
Miscellaneous Revenue Act of 1988, Pub. L. 100-647, to which such
amendment relates, see section 7817 of Pub. L. 101-239, set out as
a note under section 1 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Section 5033(d)(1) of Pub. L. 100-647 provided that: "The
amendments made by subsections (a) and (c) [enacting section 2056A
of this title and amending this section and section 2106 of this
title] shall apply to estates of the decedents dying after the date
of the enactment of this Act [Nov. 10, 1988]."
Section 6152(c) of Pub. L. 100-647 provided that:
"(1) In general. - Except as otherwise provided in this
subsection -
"(A) the amendment made by subsection (a) [amending this
section] shall apply with respect to decedents dying after
December 31, 1981, and
"(B) the amendment made by subsection (b) [amending section
2523 of this title] shall apply to transfers after December 31,
1981.
"(2) Not to apply to extent inconsistent with prior return. - In
the case of any estate or gift tax return filed before the date of
the enactment of this Act [Nov. 10, 1988], the amendments made by
this section [amending this section and section 2523 of this title]
shall not apply to the extent such amendments would be inconsistent
with the treatment of the annuity on such return unless the
executor or donor (as the case may be) otherwise elects under this
paragraph before the day 2 years after the date of the enactment of
this Act.
"(3) Extension of time for election out. - The time for making an
election under section 2056(b)(7)(C)(ii) or 2523(f)(6)(B) of the
1986 Code (as added by this subsection) shall not expire before the
day 2 years after the date of the enactment of this Act (and, if
such election is made within the time permitted under this
paragraph, the requirement of such section 2056(b)(7)(C)(ii) that
it be made on the return shall not apply)."
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by Pub. L. 98-369 effective as if included in the
amendment made by section 403 of the Economic Recovery Tax Act of
1981 [Pub. L. 97-34, see Effective Date of 1981 Amendment note
below], see section 1027(c) of Pub. L. 98-369, set out as a note
under section 2053 of this title.
EFFECTIVE DATE OF 1983 AMENDMENT
Amendment by Pub. L. 97-448 effective, except as otherwise
provided, as if it had been included in the provision of the
Economic Recovery Tax Act of 1981, Pub. L. 97-34, to which such
amendment relates, see section 109 of Pub. L. 97-448, set out as a
note under section 1 of this title.
EFFECTIVE DATE OF 1981 AMENDMENT
Section 403(e) of Pub. L. 97-34, as amended by Pub. L. 97-448,
title I, Sec. 104(a)(10), Jan. 12, 1983, 96 Stat. 2381; Pub. L.
99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
"(1) Except as otherwise provided in this subsection, the
amendments made by this section [enacting sections 2044 and 2207A
of this title, amending this section and sections 691, 2012, 2035,
2040, 2045, 2046, 2519, 2523, 2602, and 6019 of this title, and
repealing sections 2515 and 2515A of this title] shall apply to the
estates of decedents dying after December 31, 1981.
"(2) The amendments made by paragraphs (1), (2), and (3)(A) of
subsection (b) [amending sections 2523 and 6019 of this title],
subparagraphs (B) and (C) of subsection (c)(3) [amending section
6019 of this title and repealing sections 2515 and 2515A of this
title], and paragraphs (2) and (3)(B) of subsection (d), and
paragraph (4)(A) of subsection (d) (to the extent related to the
tax imposed by chapter 12 of the Internal Revenue Code of 1986
[formerly I.R.C. 1954]) [enacting sections 2207A and 2519 of this
title and amending section 2523 of this title] shall apply to gifts
made after December 31, 1981.
"(3) If -
"(A) the decedent dies after December 31, 1981,
"(B) by reason of the death of the decedent property passes
from the decedent or is acquired from the decedent under a will
executed before the date which is 30 days after the date of the
enactment of this Act [Aug. 13, 1981], or a trust created before
such date, which contains a formula expressly providing that the
spouse is to receive the maximum amount of property qualifying
for the marital deduction allowable by Federal law,
"(C) the formula referred to in subparagraph (B) was not
amended to refer specifically to an unlimited marital deduction
at any time after the date which is 30 days after the date of
enactment of this Act [Aug. 13, 1981], and before the death of
the decedent, and
"(D) the State does not enact a statute applicable to such
estate which construes this type of formula as referring to the
marital deduction allowable by Federal law as amended by
subsection (a),
then the amendment made by subsection (a) shall not apply to the
estate of such decedent."
EFFECTIVE DATE OF 1978 AMENDMENT
Section 702(g)(3) of Pub. L. 95-600 provided that: "The amendment
made by this subsection [amending this section] shall apply to the
estates of decedents dying after December 31, 1976."
EFFECTIVE DATE OF 1976 AMENDMENT
Section 2002(d)(1) of Pub. L. 94-455 provided that:
"(1)(A) Except as provided in subparagraph (B), the amendment
made by subsection (a) [amending this section] shall apply with
respect to the estates of decedents dying after December 31, 1976.
"(B) If -
"(i) the decedent dies after December 31, 1976, and before
January 1, 1979,
"(ii) by reason of the death of the decedent property passes
from the decedent or is acquired from the decedent under a will
executed before January 1, 1977, or a trust created before such
date, which contains a formula expressly providing that the
spouse is to receive the maximum amount of property qualifying
for the marital deduction allowable by Federal law,
"(iii) the formula referred to in clause (ii) was not amended
at any time after December 31, 1976, and before the death of the
decedent, and
"(iv) the State does not enact a statute applicable to such
estate which construes this type of formula as referring to the
marital deduction allowable by Federal law as amended by
subsection (a),
then the amendment made by subsection (a) shall not apply to the
estate of such decedent."
Amendment by section 2009(b)(4)(D), (E) of Pub. L. 94-455
applicable with respect to transfers creating an interest in person
disclaiming made after Dec. 31, 1976, see section 2009(e)(2) of
Pub. L. 94-455, set out as an Effective Date note under section
2518 of this title.
EFFECTIVE DATE OF 1966 AMENDMENT
Section 1(b) of Pub. L. 89-621 provided that: "The amendment made
by subsection (a) [amending this section] shall apply with respect
to estates of decedents dying on or after the date of the enactment
of this Act [Oct. 4, 1966]."
COMMENCEMENT OF JUDICIAL PROCEEDING TO REFORM TRUST
Section 11701(l)(2) of Pub. L. 101-508 provided that: "The period
during which a proceeding may be commenced under section
2056(d)(5)(A)(ii) of the Internal Revenue Code of 1986 (as
redesignated by paragraph (1)) shall not expire before the date 6
months after the date of the enactment of this Act [Nov. 5, 1990]."
APPLICATION OF AMENDMENTS BY SECTION 5033 OF PUB. L. 100-647 TO
ESTATES OF, OR GIFTS BY, NONCITIZEN AND NONRESIDENT INDIVIDUALS
Section 7815(d)(14) of Pub. L. 101-239 provided that: "In the
case of the estate of, or gift by, an individual who was not a
citizen or resident of the United States but was a resident of a
foreign country with which the United States has a tax treaty with
respect to estate, inheritance, or gift taxes, the amendments made
by section 5033 of the 1988 Act [Pub. L. 100-647, enacting section
2056A of this title and amending this section and sections 2106 and
2523 of this title] shall not apply to the extent such amendments
would be inconsistent with the provisions of such treaty relating
to estate, inheritance, or gift tax marital deductions. In the case
of the estate of an individual dying before the date 3 years after
the date of the enactment of this Act [Dec. 19, 1989], or a gift by
an individual before the date 3 years after the date of the
enactment of this Act, the requirement of the preceding sentence
that the individual not be a citizen or resident of the United
States shall not apply."
DISCLAIMER OF INTEREST ARISING FROM ESTATES OF PERSONS DYING BEFORE
OCT. 4, 1966, HAVING ESTATE TAX RETURN FILING DATE ON OR AFTER JAN.
1, 1965
Section 1(c) of Pub. L. 89-621 provided that in the case of a
decedent dying before Oct. 4, 1966, for which the date prescribed
for filing estate tax return was on or after Jan. 1, 1965, and as a
result of a disclaimer, the surviving spouse became entitled to
receive such interest, then such interest was to be considered as
having passed from the decedent to the surviving spouse under
certain conditions, with a limit on the amount of deductions
allowed.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2012, 2013, 2014, 2032,
2044, 2056A, 2106, 2206, 2207, 2519, 2523, 2652, 2701 of this
title.
-End-
-CITE-
26 USC Sec. 2056A 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART IV - TAXABLE ESTATE
-HEAD-
Sec. 2056A. Qualified domestic trust
-STATUTE-
(a) Qualified domestic trust defined
For 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 tax
There 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 general
In 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 general
If 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 determined
If -
(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.
(C) Special rule where decedent has more than 1 qualified
domestic trust
If there is more than 1 qualified domestic trust with respect
to any decedent, the amount of the tax imposed by paragraph (1)
with respect to such trusts shall be determined by using the
highest rate of tax in effect under section 2001 as of the date
of the decedent's death (and the provisions of paragraph (3)(B)
shall not apply) unless, pursuant to a designation made by the
decedent's executor, there is 1 person -
(i) who is an individual citizen of the United States or a
domestic corporation and is responsible for filing all
returns of tax imposed under paragraph (1) with respect to
such trusts and for paying all tax so imposed, and
(ii) who meets such requirements as the Secretary may by
regulations prescribe.
(3) Certain lifetime distributions exempt from tax
(A) Income distributions
No tax shall be imposed by paragraph (1)(A) on any
distribution of income to the surviving spouse.
(B) Hardship exemption
No tax shall be imposed by paragraph (1)(A) on any
distribution to the surviving spouse on account of hardship.
(4) Tax where trust ceases to qualify
If any qualified domestic trust ceases to meet the requirements
of paragraphs (1) and (2) of subsection (a), the tax imposed by
paragraph (1) shall apply as if the surviving spouse died on the
date of such cessation.
(5) Due date
(A) Tax on distributions
The estate tax imposed by paragraph (1)(A) shall be due and
payable on the 15th day of the 4th month following the calendar
year in which the taxable event occurs; except that the estate
tax imposed by paragraph (1)(A) on distributions during the
calendar year in which the surviving spouse dies shall be due
and payable not later than the date on which the estate tax
imposed by paragraph (1)(B) is due and payable.
(B) Tax at death of spouse
The estate tax imposed by paragraph (1)(B) shall be due and
payable on the date 9 months after the date of such death.
(6) Liability for tax
Each trustee shall be personally liable for the amount of the
tax imposed by paragraph (1). Rules similar to the rules of
section 2204 shall apply for purposes of the preceding sentence.
(7) Treatment of tax
For purposes of section 2056(d), any tax paid under paragraph
(1) shall be treated as a tax paid under section 2001 with
respect to the estate of the decedent.
(8) Lien for tax
For purposes of section 6324, any tax imposed by paragraph (1)
shall be treated as an estate tax imposed under this chapter with
respect to a decedent dying on the date of the taxable event (and
the property involved shall be treated as the gross estate of
such decedent).
(9) Taxable event
The term "taxable event" means the event resulting in tax being
imposed under paragraph (1).
(10) Certain benefits allowed
(A) In general
If any property remaining in the qualified domestic trust on
the date of the death of the surviving spouse is includible in
the gross estate of such spouse for purposes of this chapter
(or would be includible if such spouse were a citizen or
resident of the United States), any benefit which is allowable
(or would be allowable if such spouse were a citizen or
resident of the United States) with respect to such property to
the estate of such spouse under section 2011, 2014, 2032,
2032A, 2055, 2056, or 6166 shall be allowed for purposes of the
tax imposed by paragraph (1)(B).
(B) Section 303
If the estate of the surviving spouse meets the requirements
of section 303 with respect to any property described in
subparagraph (A), for purposes of section 303, the tax imposed
by paragraph (1)(B) with respect to such property shall be
treated as a Federal estate tax payable with respect to the
estate of the surviving spouse.
(C) Section 6161(a)(2)
The provisions of section 6161(a)(2) shall apply with respect
to the tax imposed by paragraph (1)(B), and the reference in
such section to the executor shall be treated as a reference to
the trustees of the trust.
(11) Special rule where distribution tax paid out of trust
For purposes of this subsection, if any portion of the tax
imposed by paragraph (1)(A) with respect to any distribution is
paid out of the trust, an amount equal to the portion so paid
shall be treated as a distribution described in paragraph (1)(A).
(12) Special rule where spouse becomes citizen
If the surviving spouse of the decedent becomes a citizen of
the United States and if -
(A) such spouse was a resident of the United States at all
times after the date of the death of the decedent and before
such spouse becomes a citizen of the United States,
(B) no tax was imposed by paragraph (1)(A) with respect to
any distribution before such spouse becomes such a citizen, or
(C) such spouse elects -
(i) to treat any distribution on which tax was imposed by
paragraph (1)(A) as a taxable gift made by such spouse for
purposes of -
(I) section 2001, and
(II) determining the amount of the tax imposed by section
2501 on actual taxable gifts made by such spouse during the
year in which the spouse becomes a citizen or any
subsequent year, and
(ii) to treat any reduction in the tax imposed by paragraph
(1)(A) by reason of the credit allowable under section 2010
with respect to the decedent as a credit allowable to such
surviving spouse under section 2505 for purposes of
determining the amount of the credit allowable under section
2505 with respect to taxable gifts made by the surviving
spouse during the year in which the spouse becomes a citizen
or any subsequent year,
paragraph (1)(A) shall not apply to any distributions after
such spouse becomes such a citizen (and paragraph (1)(B) shall
not apply).
(13) Coordination with section 1015
For purposes of section 1015, any distribution on which tax is
imposed by paragraph (1)(A) shall be treated as a transfer by
gift, and any tax paid under paragraph (1)(A) shall be treated as
a gift tax.
(14) Coordination with terminable interest rules
Any interest in a qualified domestic trust shall not be treated
as failing to meet the requirements of paragraph (5) or (7) of
section 2056(b) merely by reason of any provision of the trust
instrument permitting the withholding from any distribution of an
amount to pay the tax imposed by paragraph (1) on such
distribution.
(15) No tax on certain distributions
No tax shall be imposed by paragraph (1) on any distribution to
the surviving spouse to the extent such distribution is to
reimburse such surviving spouse for any tax imposed by subtitle A
on any item of income of the trust to which such surviving spouse
is not entitled under the terms of the trust.
(c) Definitions
For purposes of this section -
(1) Property includes interest therein
The term "property" includes an interest in property.
(2) Income
Except as provided in regulations, the term "income" has the
meaning given to such term by section 643(b).
(3) Trust
To the extent provided in regulations prescribed by the
Secretary, the term "trust" includes other arrangements which
have substantially the same effect as a trust.
(d) Election
An election under this section with respect to any trust shall be
made by the executor on the return of the tax imposed by section
2001. Such an election, once made, shall be irrevocable. No
election may be made under this section on any return if such
return is filed more than one year after the time prescribed by law
(including extensions) for filing such return.
(e) Regulations
The Secretary shall prescribe such regulations as may be
necessary or appropriate to carry out the purposes of this section,
including regulations under which there may be treated as a
qualified domestic trust any annuity or other payment which is
includible in the decedent's gross estate and is by its terms
payable for life or a term of years.
-SOURCE-
(Added Pub. L. 100-647, title V, Sec. 5033(a)(2), Nov. 10, 1988,
102 Stat. 3670; amended Pub. L. 101-239, title VII, Sec.
7815(d)(7), (9)-(13), (15), Dec. 19, 1989, 103 Stat. 2415-2418;
Pub. L. 101-508, title XI, Secs. 11702(g)(2)(A), (B), (3)(A), (4),
11704(a)(15), Nov. 5, 1990, 104 Stat. 1388-515, 1388-516, 1388-518;
Pub. L. 105-34, title XIII, Secs. 1312(a), 1314(a), Aug. 5, 1997,
111 Stat. 1044, 1045; Pub. L. 107-16, title V, Sec. 532(c)(6), June
7, 2001, 115 Stat. 74.)
-STATAMEND-
AMENDMENT OF SUBSECTION (B)(10)(A)
Pub. L. 107-16, title V, Sec. 532(c)(6), (d), title IX, Sec. 901,
June 7, 2001, 115 Stat. 74, 75, 150, provided that, applicable to
estates of decedents dying, and generation-skipping transfers,
after Dec. 31, 2004, subsection (b)(10)(A) of this section is
temporarily amended -
(1) by striking out "2011," before "2014,", and
(2) by inserting "2058," after "2056,".
See Effective and Termination Dates of 2001 Amendment note below.
-MISC1-
AMENDMENTS
1997 - Subsec. (a)(1)(A). Pub. L. 105-34, Sec. 1314(a), inserted
"except as provided in regulations prescribed by the Secretary,"
before "requires".
Subsec. (c)(3). Pub. L. 105-34, Sec. 1312(a), added par. (3).
1990 - Subsec. (a)(1). Pub. L. 101-508, Sec. 11702(g)(2)(A),
amended par. (1) generally. Prior to amendment, par. (1) read as
follows: "the trust instrument requires that at least 1 trustee of
the trust be an individual citizen of the United States or a
domestic corporation and that no distribution from the trust may be
made without the approval of such a trustee,".
Subsec. (b)(2)(B)(ii). Pub. L. 101-508, Sec. 11704(a)(15),
substituted "therefor" for "therefore" in concluding provisions.
Subsec. (b)(10)(A). Pub. L. 101-508, Sec. 11702(g)(4),
substituted "section 2011, 2014, 2032" for "section 2032".
Subsec. (b)(14), (15). Pub. L. 101-508, Sec. 11702(g)(2)(B),
added pars. (14) and (15).
Subsec. (d). Pub. L. 101-508, Sec. 11702(g)(3)(A), inserted at
end "No election may be made under this section on any return if
such return is filed more than one year after the time prescribed
by law (including extensions) for filing such return."
1989 - Subsec. (a)(1). Pub. L. 101-239, Sec. 7815(d)(7)(A)(i),
amended par. (1) generally. Prior to amendment, par. (1) read as
follows: "the trust instrument requires that all trustees of the
trust be individual citizens of the United States or domestic
corporations,".
Subsec. (a)(2) to (4). Pub. L. 101-239, Sec. 7815(d)(7)(A)(ii),
redesignated pars. (3) and (4) as (2) and (3), respectively, and
struck out former par. (2) which read as follows: "the surviving
spouse of the decedent is entitled to all the income from the
property in such trust, payable annually or at more frequent
intervals,".
Subsec. (b)(1)(A). Pub. L. 101-239, Sec. 7815(d)(7)(C), struck
out "other than a distribution of income required under subsection
(a)(2)" after "qualified domestic trust".
Subsec. (b)(2)(B)(ii). Pub. L. 101-239, Sec. 7815(d)(11),
inserted "(with interest)" after "credit or refund".
Subsec. (b)(2)(C). Pub. L. 101-239, Sec. 7815(d)(12), added
subpar. (C).
Subsec. (b)(3). Pub. L. 101-239, Sec. 7815(d)(7)(B), added par.
(3). Former par. (3) redesignated (4).
Subsec. (b)(4). Pub. L. 101-239, Sec. 7815(d)(7)(D), amended par.
(4) generally. Prior to amendment, par. (4) read as follows: "If
any person other than an individual citizen of the United States or
a domestic corporation becomes a trustee of a qualified domestic
trust (or such trust ceases to meet the requirements of subsection
(a)(3)), the tax imposed by paragraph (1) shall apply as if the
surviving spouse died on the date on which such person became such
a trustee or the date of such cessation, as the case may be."
Pub. L. 101-239, Sec. 7815(d)(7)(B), redesignated par. (3) as
(4). Former par. (4) redesignated (5).
Subsec. (b)(5). Pub. L. 101-239, Sec. 7815(d)(15), amended par.
(5) generally. Prior to amendment, par. (5) read as follows: "The
estate tax imposed by paragraph (1) shall be due and payable on the
15th day of the 4th month following the calendar year in which the
taxable event occurs."
Pub. L. 101-239, Sec. 7815(d)(7)(B), redesignated par. (4) as
(5). Former par. (5) redesignated (6).
Subsec. (b)(6) to (9). Pub. L. 101-239, Sec. 7815(d)(7)(B),
redesignated pars. (5) to (8) as (6) to (9), respectively.
Subsec. (b)(10) to (13). Pub. L. 101-239, Sec. 7815(d)(9), added
pars. (10) to (13).
Subsec. (c)(2). Pub. L. 101-239, Sec. 7815(d)(10), substituted
"Except as provided in regulations, the term" for "The term".
Subsec. (e). Pub. L. 101-239, Sec. 7815(d)(13), added subsec.
(e).
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Amendment by Pub. L. 107-16 applicable to estates of decedents
dying, and generation-skipping transfers, after Dec. 31, 2004, see
section 532(d) of Pub. L. 107-16, set out as a note under section
2011 of this title.
Amendment by Pub. L. 107-16 inapplicable to estates of decedents
dying, gifts made, or generation skipping transfers, after Dec. 31,
2010, and the Internal Revenue Code of 1986 to be applied and
administered to such estates, gifts, and transfers as if such
amendment had never been enacted, see section 901 of Pub. L.
107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1997 AMENDMENT
Section 1312(b) of Pub. L. 105-34 provided that: "The amendment
made by this section [amending this section] shall apply to estates
of decedents dying after the date of the enactment of this Act
[Aug. 5, 1997]."
Section 1314(b) of Pub. L. 105-34 provided that: "The amendment
made by this section [amending this section] shall apply to estates
of decedents dying after the date of the enactment of this Act
[Aug. 5, 1997]."
EFFECTIVE DATE OF 1990 AMENDMENT
Amendment by section 11702(g)(2), (4) of Pub. L. 101-508
effective as if included in the provision of the Technical and
Miscellaneous Revenue Act of 1988, Pub. L. 100-647, to which such
amendment relates, see section 11702(j) of Pub. L. 101-508, set out
as a note under section 59 of this title.
Section 11702(g)(3)(B) of Pub. L. 101-508 provided that: "The
amendment made by subparagraph (A) [amending this section] shall
not apply to any election made before the date 6 months after the
date of the enactment of this Act [Nov. 5, 1990]."
EFFECTIVE DATE OF 1989 AMENDMENT
Amendment by Pub. L. 101-239 effective, except as otherwise
provided, as if included in the provision of the Technical and
Miscellaneous Revenue Act of 1988, Pub. L. 100-647, to which such
amendment relates, see section 7817 of Pub. L. 101-239, set out as
a note under section 1 of this title.
EFFECTIVE DATE
Section applicable to estates of decedents dying after Nov. 10,
1988, see section 5033(d)(1) of Pub. L. 100-647, set out as an
Effective Date of 1988 Amendment note under section 2056 of this
title.
TRANSITIONAL RULE
Section 1303 of Pub. L. 105-34 provided that:
"(a) General Rule. - In the case of any trust created under an
instrument executed before the date of the enactment of the Revenue
Reconciliation Act of 1990 [Nov. 5, 1990], such trust shall be
treated as meeting the requirements of paragraph (1) of section
2056A(a) of the Internal Revenue Code of 1986 if the trust
instrument requires that all trustees of the trust be individual
citizens of the United States or domestic corporations.
"(b) Effective Date. - The provisions of subsection (a) shall
take effect as if included in the provisions of section 11702(g) of
the Revenue Reconciliation Act of 1990 [Pub. L. 101-508]."
APPLICATION OF AMENDMENTS BY SECTION 5033 OF PUB. L. 100-647 TO
ESTATES OF, OR GIFTS BY, NONCITIZEN AND NONRESIDENT INDIVIDUALS
For provisions directing that in the case of the estate of, or
gift by, an individual who was not a citizen or resident of the
United States but was a resident of a foreign country with which
the United States has a tax treaty with respect to estate,
inheritance, or gift taxes, this section shall not apply to the
extent such section would be inconsistent with the provisions of
such treaty relating to estate, inheritance, or gift tax marital
deductions, but that in the case of the estate of an individual
dying before the date 3 years after Dec. 19, 1989, or a gift by an
individual before the date 3 years after Dec. 19, 1989, the
requirement of the preceding provision that the individual not be a
citizen or resident of the United States shall not apply, see
section 7815(d)(14) of Pub. L. 101-239, set out as a note under
section 2056 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2056, 2210 of this title.
-End-
-CITE-
26 USC Sec. 2057 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART IV - TAXABLE ESTATE
-HEAD-
Sec. 2057. Family-owned business interests
-STATUTE-
(a) General rule
(1) Allowance of deduction
For purposes of the tax imposed by section 2001, in the case of
an estate of a decedent to which this section applies, the value
of the taxable estate shall be determined by deducting from the
value of the gross estate the adjusted value of the qualified
family-owned business interests of the decedent which are
described in subsection (b)(2).
(2) Maximum deduction
The deduction allowed by this section shall not exceed
$675,000.
(3) Coordination with unified credit
(A) In general
Except as provided in subparagraph (B), if this section
applies to an estate, the applicable exclusion amount under
section 2010 shall be $625,000.
(B) Increase in unified credit if deduction is less than
$675,000
If the deduction allowed by this section is less than
$675,000, the amount of the applicable exclusion amount under
section 2010 shall be increased (but not above the amount which
would apply to the estate without regard to this section) by
the excess of $675,000 over the amount of the deduction
allowed.
(b) Estates to which section applies
(1) In general
This section shall apply to an estate if -
(A) the decedent was (at the date of the decedent's death) a
citizen or resident of the United States,
(B) the executor elects the application of this section and
files the agreement referred to in subsection (h),
(C) the sum of -
(i) the adjusted value of the qualified family-owned
business interests described in paragraph (2), plus
(ii) the amount of the gifts of such interests determined
under paragraph (3),
exceeds 50 percent of the adjusted gross estate, and
(D) during the 8-year period ending on the date of the
decedent's death there have been periods aggregating 5 years or
more during which -
(i) such interests were owned by the decedent or a member
of the decedent's family, and
(ii) there was material participation (within the meaning
of section 2032A(e)(6)) by the decedent or a member of the
decedent's family in the operation of the business to which
such interests relate.
(2) Includible qualified family-owned business interests
The qualified family-owned business interests described in this
paragraph are the interests which -
(A) are included in determining the value of the gross
estate, and
(B) are acquired by any qualified heir from, or passed to any
qualified heir from, the decedent (within the meaning of
section 2032A(e)(9)).
(3) Includible gifts of interests
The amount of the gifts of qualified family-owned business
interests determined under this paragraph is the sum of -
(A) the amount of such gifts from the decedent to members of
the decedent's family taken into account under section
2001(b)(1)(B), plus
(B) the amount of such gifts otherwise excluded under section
2503(b),
to the extent such interests are continuously held by members of
such family (other than the decedent's spouse) between the date
of the gift and the date of the decedent's death.
(c) Adjusted gross estate
For purposes of this section, the term "adjusted gross estate"
means the value of the gross estate -
(1) reduced by any amount deductible under paragraph (3) or (4)
of section 2053(a), and
(2) increased by the excess of -
(A) the sum of -
(i) the amount of gifts determined under subsection (b)(3),
plus
(ii) the amount (if more than de minimis) of other
transfers from the decedent to the decedent's spouse (at the
time of the transfer) within 10 years of the date of the
decedent's death, plus
(iii) the amount of other gifts (not included under clause
(i) or (ii)) from the decedent within 3 years of such date,
other than gifts to members of the decedent's family
otherwise excluded under section 2503(b), over
(B) the sum of the amounts described in clauses (i), (ii),
and (iii) of subparagraph (A) which are otherwise includible in
the gross estate.
For purposes of the preceding sentence, the Secretary may provide
that de minimis gifts to persons other than members of the
decedent's family shall not be taken into account.
(d) Adjusted value of the qualified family-owned business interests
For purposes of this section, the adjusted value of any qualified
family-owned business interest is the value of such interest for
purposes of this chapter (determined without regard to this
section), reduced by the excess of -
(1) any amount deductible under paragraph (3) or (4) of section
2053(a), over
(2) the sum of -
(A) any indebtedness on any qualified residence of the
decedent the interest on which is deductible under section
163(h)(3), plus
(B) any indebtedness to the extent the taxpayer establishes
that the proceeds of such indebtedness were used for the
payment of educational and medical expenses of the decedent,
the decedent's spouse, or the decedent's dependents (within the
meaning of section 152), plus
(C) any indebtedness not described in subparagraph (A) or
(B), to the extent such indebtedness does not exceed $10,000.
(e) Qualified family-owned business interest
(1) In general
For purposes of this section, the term "qualified family-owned
business interest" means -
(A) an interest as a proprietor in a trade or business
carried on as a proprietorship, or
(B) an interest in an entity carrying on a trade or business,
if -
(i) at least -
(I) 50 percent of such entity is owned (directly or
indirectly) by the decedent and members of the decedent's
family,
(II) 70 percent of such entity is so owned by members of
2 families, or
(III) 90 percent of such entity is so owned by members of
3 families, and
(ii) for purposes of subclause (II) or (III) of clause (i),
at least 30 percent of such entity is so owned by the
decedent and members of the decedent's family.
For purposes of the preceding sentence, a decedent shall be
treated as engaged in a trade or business if any member of the
decedent's family is engaged in such trade or business.
(2) Limitation
Such term shall not include -
(A) any interest in a trade or business the principal place
of business of which is not located in the United States,
(B) any interest in an entity, if the stock or debt of such
entity or a controlled group (as defined in section 267(f)(1))
of which such entity was a member was readily tradable on an
established securities market or secondary market (as defined
by the Secretary) at any time within 3 years of the date of the
decedent's death,
(C) any interest in a trade or business not described in
section 542(c)(2), if more than 35 percent of the adjusted
ordinary gross income of such trade or business for the taxable
year which includes the date of the decedent's death would
qualify as personal holding company income (as defined in
section 543(a) without regard to paragraph (2)(B) thereof) if
such trade or business were a corporation,
(D) that portion of an interest in a trade or business that
is attributable to -
(i) cash or marketable securities, or both, in excess of
the reasonably expected day-to-day working capital needs of
such trade or business, and
(ii) any other assets of the trade or business (other than
assets used in the active conduct of a trade or business
described in section 542(c)(2)), which produce, or are held
for the production of, personal holding company income (as
defined in subparagraph (C)) or income described in section
954(c)(1) (determined without regard to subparagraph (A)
thereof and by substituting "trade or business" for
"controlled foreign corporation").
In the case of a lease of property on a net cash basis by the
decedent to a member of the decedent's family, income from such
lease shall not be treated as personal holding company income for
purposes of subparagraph (C), and such property shall not be
treated as an asset described in subparagraph (D)(ii), if such
income and property would not be so treated if the lessor had
engaged directly in the activities engaged in by the lessee with
respect to such property.
(3) Rules regarding ownership
(A) Ownership of entities
For purposes of paragraph (1)(B) -
(i) Corporations
Ownership of a corporation shall be determined by the
holding of stock possessing the appropriate percentage of the
total combined voting power of all classes of stock entitled
to vote and the appropriate percentage of the total value of
shares of all classes of stock.
(ii) Partnerships
Ownership of a partnership shall be determined by the
owning of the appropriate percentage of the capital interest
in such partnership.
(B) Ownership of tiered entities
For purposes of this section, if by reason of holding an
interest in a trade or business, a decedent, any member of the
decedent's family, any qualified heir, or any member of any
qualified heir's family is treated as holding an interest in
any other trade or business -
(i) such ownership interest in the other trade or business
shall be disregarded in determining if the ownership interest
in the first trade or business is a qualified family-owned
business interest, and
(ii) this section shall be applied separately in
determining if such interest in any other trade or business
is a qualified family-owned business interest.
(C) Individual ownership rules
For purposes of this section, an interest owned, directly or
indirectly, by or for an entity described in paragraph (1)(B)
shall be considered as being owned proportionately by or for
the entity's shareholders, partners, or beneficiaries. A person
shall be treated as a beneficiary of any trust only if such
person has a present interest in such trust.
(f) Tax treatment of failure to materially participate in business
or dispositions of interests
(1) In general
There is imposed an additional estate tax if, within 10 years
after the date of the decedent's death and before the date of the
qualified heir's death -
(A) the material participation requirements described in
section 2032A(c)(6)(B) are not met with respect to the
qualified family-owned business interest which was acquired (or
passed) from the decedent,
(B) the qualified heir disposes of any portion of a qualified
family-owned business interest (other than by a disposition to
a member of the qualified heir's family or through a qualified
conservation contribution under section 170(h)),
(C) the qualified heir loses United States citizenship
(within the meaning of section 877) or with respect to whom an
event described in subparagraph (A) or (B) of section 877(e)(1)
occurs, and such heir does not comply with the requirements of
subsection (g), or
(D) the principal place of business of a trade or business of
the qualified family-owned business interest ceases to be
located in the United States.
(2) Additional estate tax
(A) In general
The amount of the additional estate tax imposed by paragraph
(1) shall be equal to -
(i) the applicable percentage of the adjusted tax
difference attributable to the qualified family-owned
business interest, plus
(ii) interest on the amount determined under clause (i) at
the underpayment rate established under section 6621 for the
period beginning on the date the estate tax liability was due
under this chapter and ending on the date such additional
estate tax is due.
(B) Applicable percentage
For purposes of this paragraph, the applicable percentage
shall be determined under the following table:
If the event described in
paragraph (1) occurs in
the following year of The applicable
material participation: percentage is:
1 through 6 100
7 80
8 60
9 40
10 20.
(C) Adjusted tax difference
For purposes of subparagraph (A) -
(i) In general
The adjusted tax difference attributable to a qualified
family-owned business interest is the amount which bears the
same ratio to the adjusted tax difference with respect to the
estate (determined under clause (ii)) as the value of such
interest bears to the value of all qualified family-owned
business interests described in subsection (b)(2).
(ii) Adjusted tax difference with respect to the estate
For purposes of clause (i), the term "adjusted tax
difference with respect to the estate" means the excess of
what would have been the estate tax liability but for the
election under this section over the estate tax liability.
For purposes of this clause, the term "estate tax liability"
means the tax imposed by section 2001 reduced by the credits
allowable against such tax.
(3) Use in trade or business by family members
A qualified heir shall not be treated as disposing of an
interest described in subsection (e)(1)(A) by reason of ceasing
to be engaged in a trade or business so long as the property to
which such interest relates is used in a trade or business by any
member of such individual's family.
(g) Security requirements for noncitizen qualified heirs
(1) In general
Except upon the application of subparagraph (F) of subsection
(i)(3), if a qualified heir is not a citizen of the United
States, any interest under this section passing to or acquired by
such heir (including any interest held by such heir at a time
described in subsection (f)(1)(C)) shall be treated as a
qualified family-owned business interest only if the interest
passes or is acquired (or is held) in a qualified trust.
(2) Qualified trust
The term "qualified trust" means a trust -
(A) which is organized under, and governed by, the laws of
the United States or a State, and
(B) except as otherwise provided in regulations, with respect
to which the trust instrument requires that at least 1 trustee
of the trust be an individual citizen of the United States or a
domestic corporation.
(h) Agreement
The agreement referred to in this subsection is a written
agreement signed by each person in being who has an interest
(whether or not in possession) in any property designated in such
agreement consenting to the application of subsection (f) with
respect to such property.
(i) Other definitions and applicable rules
For purposes of this section -
(1) Qualified heir
The term "qualified heir" -
(A) has the meaning given to such term by section
2032A(e)(1), and
(B) includes any active employee of the trade or business to
which the qualified family-owned business interest relates if
such employee has been employed by such trade or business for a
period of at least 10 years before the date of the decedent's
death.
(2) Member of the family
The term "member of the family" has the meaning given to such
term by section 2032A(e)(2).
(3) Applicable rules
Rules similar to the following rules shall apply:
(A) Section 2032A(b)(4) (relating to decedents who are
retired or disabled).
(B) Section 2032A(b)(5) (relating to special rules for
surviving spouses).
(C) Section 2032A(c)(2)(D) (relating to partial
dispositions).
(D) Section 2032A(c)(3) (relating to only 1 additional tax
imposed with respect to any 1 portion).
(E) Section 2032A(c)(4) (relating to due date).
(F) Section 2032A(c)(5) (relating to liability for tax;
furnishing of bond).
(G) Section 2032A(c)(7) (relating to no tax if use begins
within 2 years; active management by eligible qualified heir
treated as material participation).
(H) Paragraphs (1) and (3) of section 2032A(d) (relating to
election; agreement).
(I) Section 2032A(e)(10) (relating to community property).
(J) Section 2032A(e)(14) (relating to treatment of
replacement property acquired in section 1031 or 1033
transactions).
(K) Section 2032A(f) (relating to statute of limitations).
(L) Section 2032A(g) (relating to application to interests in
partnerships, corporations, and trusts).
(M) Subsections (h) and (i) of section 2032A.
(N) Section 6166(b)(3) (relating to farmhouses and certain
other structures taken into account).
(O) Subparagraphs (B), (C), and (D) of section 6166(g)(1)
(relating to acceleration of payment).
(P) Section 6324B (relating to special lien for additional
estate tax).
(j) Termination
This section shall not apply to the estates of decedents dying
after December 31, 2003.
-SOURCE-
(Added Pub. L. 105-34, title V, Sec. 502(a), Aug. 5, 1997, 111
Stat. 847, Sec. 2033A; renumbered Sec. 2057 and amended Pub. L.
105-206, title VI, Sec. 6007(b)(1)(A)-(D), (2)-(7), July 22, 1998,
112 Stat. 807-809; Pub. L. 107-16, title V, Sec. 521(d), June 7,
2001, 115 Stat. 72.)
-STATAMEND-
AMENDMENT OF SECTION
For termination of amendment by section 901 of Pub. L. 107-16,
see Effective and Termination Dates of 2001 Amendment note below.
-MISC1-
PRIOR PROVISIONS
A prior section 2057, added Pub. L. 99-514, title XI, Sec.
1172(a), Oct. 22, 1986, 100 Stat. 2513; amended Pub. L. 100-203,
title X, Secs. 10411(a), 10412(a), Dec. 22, 1987, 101 Stat.
1330-432, 1330-433; Pub. L. 100-647, title I, Sec. 1011B(g)(3),
Nov. 10, 1988, 102 Stat. 3490, related to sales of employer
securities to employee stock ownership plans or worker-owned
cooperatives, prior to repeal by Pub. L. 101-239, title VII, Sec.
7304(a)(1), (3), Dec. 19, 1989, 103 Stat. 2352, 2353, applicable to
estates of decedents dying after Dec. 19, 1989.
Another prior section 2057, added Pub. L. 94-455, title XX, Sec.
2007(a), Oct. 4, 1976, 90 Stat. 1890; amended Pub. L. 95-600, title
VII, Sec. 702(l)(1), (2), Nov. 6, 1978, 92 Stat. 2934, 2935,
related to bequests, etc., to certain minor children, prior to
repeal by Pub. L. 97-34, title IV, Sec. 427(a), (c), Aug. 13, 1981,
95 Stat. 3181, applicable to estates of decedents dying after Dec.
31, 1981.
AMENDMENTS
2001 - Subsec. (j). Pub. L. 107-16, Secs. 521(d), 901,
temporarily added subsec. (j). See Effective and Termination Dates
of 2001 Amendment note below.
1998 - Pub. L. 105-206, Sec. 6007(b)(1)(A), (B), renumbered
section 2033A of this title as this section and substituted
"interests" for "exclusion" in section catchline.
Subsec. (a). Pub. L. 105-206, Sec. 6007(b)(1)(B), substituted
"General rule" for "In general" in heading and amended text
generally. Prior to amendment, text read as follows: "In the case
of an estate of a decedent to which this section applies, the value
of the gross estate shall not include the lesser of -
"(1) the adjusted value of the qualified family-owned business
interests of the decedent otherwise includible in the estate, or
"(2) the excess of $1,300,000 over the applicable exclusion
amount under section 2010(c) with respect to such estate."
Subsec. (b)(2)(A). Pub. L. 105-206, Sec. 6007(b)(1)(C), struck
out "(without regard to this section)" after "gross estate".
Subsec. (b)(3). Pub. L. 105-206, Sec. 6007(b)(2), reenacted
heading without change and amended text generally. Prior to
amendment, text read as follows: "The amount of the gifts of
qualified family-owned business interests determined under this
paragraph is the excess of -
"(A) the sum of -
"(i) the amount of such gifts from the decedent to members of
the decedent's family taken into account under subsection
2001(b)(1)(B), plus
"(ii) the amount of such gifts otherwise excluded under
section 2503(b),
to the extent such interests are continuously held by members of
such family (other than the decedent's spouse) between the date
of the gift and the date of the decedent's death, over
"(B) the amount of such gifts from the decedent to members of
the decedent's family otherwise included in the gross estate."
Subsec. (c). Pub. L. 105-206, Sec. 6007(b)(1)(D), struck out
"(determined without regard to this section)" after "the gross
estate" in introductory provisions.
Subsec. (e)(1). Pub. L. 105-206, Sec. 6007(b)(5)(A), inserted
concluding provisions.
Subsec. (e)(2). Pub. L. 105-206, Sec. 6007(b)(3)(C), inserted
concluding provisions.
Subsec. (e)(2)(C). Pub. L. 105-206, Sec. 6007(b)(3)(A),
substituted "(as defined in section 543(a) without regard to
paragraph (2)(B) thereof) if such trade or business were a
corporation" for "(as defined in section 543(a))".
Subsec. (e)(2)(D)(ii). Pub. L. 105-206, Sec. 6007(b)(3)(B),
substituted "personal holding company income (as defined in
subparagraph (C)) or income described" for "income of which is
described in section 543(a) or".
Subsec. (f)(2)(A)(i). Pub. L. 105-206, Sec. 6007(b)(4)(A), struck
out "(as determined under rules similar to the rules of section
2032A(c)(2)(B))" after "business interest".
Subsec. (f)(2)(C). Pub. L. 105-206, Sec. 6007(b)(4)(B), added
subpar. (C).
Subsec. (f)(3). Pub. L. 105-206, Sec. 6007(b)(5)(B), added par.
(3).
Subsec. (g)(1). Pub. L. 105-206, Sec. 6007(b)(6), struck out "or
(M)" after "subparagraph (F)".
Subsec. (i)(3)(L) to (P). Pub. L. 105-206, Sec. 6007(b)(7), added
subpars. (L) and (M) and redesignated former subpars. (L) to (N) as
(N) to (P), respectively.
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Amendment by Pub. L. 107-16 applicable to estates of decedents
dying, and generation-skipping transfers, after Dec. 31, 2003, see
section 521(e)(3) of Pub. L. 107-16, set out as a note under
section 2010 of this title.
Amendment by Pub. L. 107-16 inapplicable to estates of decedents
dying, gifts made, or generation skipping transfers, after Dec. 31,
2010, and the Internal Revenue Code of 1986 to be applied and
administered to such estates, gifts, and transfers as if such
amendment had never been enacted, see section 901 of Pub. L.
107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1998 AMENDMENT
Amendment by Pub. L. 105-206 effective, except as otherwise
provided, as if included in the provisions of the Taxpayer Relief
Act of 1997, Pub. L. 105-34, to which such amendment relates, see
section 6024 of Pub. L. 105-206, set out as a note under section 1
of this title.
EFFECTIVE DATE
Section 502(c) of Pub. L. 105-34 provided that: "The amendments
made by this section [enacting this section] shall apply to estates
of decedents dying after December 31, 1997."
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in section 2031 of this title.
-End-
-CITE-
26 USC Sec. 2058 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter A - Estates of Citizens or Residents
PART IV - TAXABLE ESTATE
-HEAD-
Sec. 2058. State death taxes
-STATUTE-
(a) Allowance of deduction
For purposes of the tax imposed by section 2001, the value of the
taxable estate shall be determined by deducting from the value of
the gross estate the amount of any estate, inheritance, legacy, or
succession taxes actually paid to any State or the District of
Columbia, in respect of any property included in the gross estate
(not including any such taxes paid with respect to the estate of a
person other than the decedent).
(b) Period of limitations
The deduction allowed by this section shall include only such
taxes as were actually paid and deduction therefor claimed before
the later of -
(1) 4 years after the filing of the return required by section
6018, or
(2) if -
(A) a petition for redetermination of a deficiency has been
filed with the Tax Court within the time prescribed in section
6213(a), the expiration of 60 days after the decision of the
Tax Court becomes final,
(B) an extension of time has been granted under section 6161
or 6166 for payment of the tax shown on the return, or of a
deficiency, the date of the expiration of the period of the
extension, or
(C) a claim for refund or credit of an overpayment of tax
imposed by this chapter has been filed within the time
prescribed in section 6511, the latest of the expiration of -
(i) 60 days from the date of mailing by certified mail or
registered mail by the Secretary to the taxpayer of a notice
of the disallowance of any part of such claim,
(ii) 60 days after a decision by any court of competent
jurisdiction becomes final with respect to a timely suit
instituted upon such claim, or
(iii) 2 years after a notice of the waiver of disallowance
is filed under section 6532(a)(3).
Notwithstanding sections 6511 and 6512, refund based on the
deduction may be made if the claim for refund is filed within the
period provided in the preceding sentence. Any such refund shall be
made without interest.
-SOURCE-
(Added Pub. L. 107-16, title V, Sec. 532(b), June 7, 2001, 115
Stat. 73.)
-STATAMEND-
TERMINATION OF SECTION
For termination of section by section 901 of Pub. L. 107-16, see
Effective and Termination Dates note below.
-MISC1-
EFFECTIVE AND TERMINATION DATES
Section applicable to estates of decedents dying, and
generation-skipping transfers, after Dec. 31, 2004, see section
532(d) of Pub. L. 107-16, set out as an Effective and Termination
Dates of 2001 Amendment note under section 2011 of this title.
Section inapplicable to estates of decedents dying, gifts made,
or generation skipping transfers, after Dec. 31, 2010, and the
Internal Revenue Code of 1986 to be applied and administered to
such estates, gifts, and transfers as if it had never been enacted,
see section 901 of Pub. L. 107-16, set out as a note under section
1 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in section 2056A of this title.
-End-
-CITE-
26 USC Subchapter B - Estates of Nonresidents Not
Citizens 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter B - Estates of Nonresidents Not Citizens
-HEAD-
SUBCHAPTER B - ESTATES OF NONRESIDENTS NOT CITIZENS
-MISC1-
Sec.
2101. Tax imposed.
2102. Credits against tax.
2103. Definition of gross estate.
2104. Property within the United States.
2105. Property without the United States.
2106. Taxable estate.
2107. Expatriation to avoid tax.
2108. Application of pre-1967 estate tax provisions.
AMENDMENTS
1966 - Pub. L. 89-809, title I, Sec. 108(h), Nov. 13, 1966, 80
Stat. 1574, added items 2107 and 2108.
-SECREF-
SUBCHAPTER REFERRED TO IN OTHER SECTIONS
This subchapter is referred to in sections 2014, 2053 of this
title.
-End-
-CITE-
26 USC Sec. 2101 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter B - Estates of Nonresidents Not Citizens
-HEAD-
Sec. 2101. Tax imposed
-STATUTE-
(a) Imposition
Except as provided in section 2107, a tax is hereby imposed on
the transfer of the taxable estate (determined as provided in
section 2106) of every decedent nonresident not a citizen of the
United States.
(b) Computation of tax
The tax imposed by this section shall be the amount equal to the
excess (if any) of -
(1) a tentative tax computed under section 2001(c) on the sum
of -
(A) the amount of the taxable estate, and
(B) the amount of the adjusted taxable gifts, over
(2) a tentative tax computed under section 2001(c) on the
amount of the adjusted taxable gifts.
(c) Adjustments for taxable gifts
(1) Adjusted taxable gifts defined
For purposes of this section, the term "adjusted taxable gifts"
means the total amount of the taxable gifts (within the meaning
of section 2503 as modified by section 2511) made by the decedent
after December 31, 1976, other than gifts which are includible in
the gross estate of the decedent.
(2) Adjustment for certain gift tax
For purposes of this section, the rules of section 2001(d)
shall apply.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 397; Pub. L. 89-809, title I,
Sec. 108(a), Nov. 13, 1966, 80 Stat. 1571; Pub. L. 94-455, title
XX, Sec. 2001(c)(1)(D), Oct. 4, 1976, 90 Stat. 1850; Pub. L.
100-647, title V, Sec. 5032(a), (c), Nov. 10, 1988, 102 Stat. 3669;
Pub. L. 101-239, title VII, Sec. 7815(c), Dec. 19, 1989, 103 Stat.
2415; Pub. L. 103-66, title XIII, Sec. 13208(b)(3), Aug. 10, 1993,
107 Stat. 469; Pub. L. 107-147, title IV, Sec. 411(g)(2), Mar. 9,
2002, 116 Stat. 46.)
-MISC1-
AMENDMENTS
2002 - Subsec. (b). Pub. L. 107-147 struck out concluding
provisions which read as follows: "For purposes of the preceding
sentence, there shall be appropriate adjustments in the application
of section 2001(c)(2) to reflect the difference between the amount
of the credit provided under section 2102(c) and the amount of the
credit provided under section 2010."
1993 - Subsec. (b). Pub. L. 103-66 substituted "section
2001(c)(2)" for "section 2001(c)(3)" in last sentence.
1989 - Subsec. (b). Pub. L. 101-239 inserted at end "For purposes
of the preceding sentence, there shall be appropriate adjustments
in the application of section 2001(c)(3) to reflect the difference
between the amount of the credit provided under section 2102(c) and
the amount of the credit provided under section 2010."
1988 - Subsec. (b). Pub. L. 100-647, Sec. 5032(a), substituted "a
tentative tax computed under section 2001(c)" for "a tentative tax
computed in accordance with the rate schedule set forth in
subsection (d)" in pars. (1) and (2).
Subsec. (d). Pub. L. 100-647, Sec. 5032(c), struck out subsec.
(d) which provided a rate schedule.
1976 - Pub. L. 94-455 redesignated existing provisions as (a) to
(d), inserted provisions for adjustments for taxable gifts, revised
the tax rate schedule, and struck out provisions relating to
property held by Alien Property Custodian.
1966 - Subsec. (a). Pub. L. 89-809 substituted table to be used
in computing the tax imposed on transfer of taxable estate,
determined as provided in section 2106, of every decedent
nonresident not a citizen of the United States for provisions
sending taxpayer to table in section 2001 for computation of tax
imposed.
EFFECTIVE DATE OF 2002 AMENDMENT
Amendment by Pub. L. 107-147 effective as if included in the
provisions of the Economic Growth and Tax Relief Reconciliation Act
of 2001, Pub. L. 107-16, to which such amendment relates, see
section 411(x) of Pub. L. 107-147, set out as a note under section
25B of this title.
EFFECTIVE DATE OF 1993 AMENDMENT
Amendment by Pub. L. 103-66 applicable in the case of decedents
dying and gifts made after Dec. 31, 1992, see section 13208(c) of
Pub. L. 103-66, set out as a note under section 2001 of this title.
EFFECTIVE DATE OF 1989 AMENDMENT
Amendment by Pub. L. 101-239 effective, except as otherwise
provided, as if included in the provision of the Technical and
Miscellaneous Revenue Act of 1988, Pub. L. 100-647, to which such
amendment relates, see section 7817 of Pub. L. 101-239, set out as
a note under section 1 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Section 5032(d) of Pub. L. 100-647 provided that: "The amendments
made by this section [amending this section and section 2102 of
this title] shall apply to the estates of decedents dying after the
date of the enactment of this Act [Nov. 10, 1988]."
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by Pub. L. 94-455 applicable to estates of decedents
dying after Dec. 31, 1976, see section 2001(d)(1) of Pub. L.
94-455, set out as a note under section 2001 of this title.
EFFECTIVE DATE OF 1966 AMENDMENT
Section 108(i) of Pub. L. 89-809 provided that: "The amendments
made by this section [amending this section and sections 2102,
2104, 2105, 2106, and 6018 of this title and enacting sections 2107
and 2108 of this title] shall apply with respect to estates of
decedents dying after the date of the enactment of this Act [Nov.
13, 1966]."
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 691, 2013, 2014, 2015,
2102, 2103, 2106, 2107, 2108, 2201 of this title.
-End-
-CITE-
26 USC Sec. 2102 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter B - Estates of Nonresidents Not Citizens
-HEAD-
Sec. 2102. Credits against tax
-STATUTE-
(a) In general
The tax imposed by section 2101 shall be credited with the
amounts determined in accordance with sections 2011 to 2013,
inclusive (relating to State death taxes, gift tax, and tax on
prior transfers), subject to the special limitation provided in
subsection (b).
(b) Special limitation
The maximum credit allowed under section 2011 against the tax
imposed by section 2101 for State death taxes paid shall be an
amount which bears the same ratio to the credit computed as
provided in section 2011(b) as the value of the property, as
determined for purposes of this chapter, upon which State death
taxes were paid and which is included in the gross estate under
section 2103 bears to the value of the total gross estate under
section 2103. For purposes of this subsection, the term "State
death taxes" means the taxes described in section 2011(a).
(c) Unified credit
(1) In general
A credit of $13,000 shall be allowed against the tax imposed by
section 2101.
(2) Residents of possessions of the United States
In the case of a decedent who is considered to be a
"nonresident not a citizen of the United States" under section
2209, the credit under this subsection shall be the greater of -
(A) $13,000, or
(B) that proportion of $46,800 which the value of that part
of the decedent's gross estate which at the time of his death
is situated in the United States bears to the value of his
entire gross estate wherever situated.
(3) Special rules
(A) Coordination with treaties
To the extent required under any treaty obligation of the
United States, the credit allowed under this subsection shall
be equal to the amount which bears the same ratio to the
applicable credit amount in effect under section 2010(c) for
the calendar year which includes the date of death as the value
of the part of the decedent's gross estate which at the time of
his death is situated in the United States bears to the value
of his entire gross estate wherever situated. For purposes of
the preceding sentence, property shall not be treated as
situated in the United States if such property is exempt from
the tax imposed by this subchapter under any treaty obligation
of the United States.
(B) Coordination with gift tax unified credit
If a credit has been allowed under section 2505 with respect
to any gift made by the decedent, each dollar amount contained
in paragraph (1) or (2) or subparagraph (A) of this paragraph
(whichever applies) shall be reduced by the amount so allowed.
(4) Limitation based on amount of tax
The credit allowed under this subsection shall not exceed the
amount of the tax imposed by section 2101.
(5) Application of other credits
For purposes of subsection (a), sections 2011 to 2013,
inclusive, shall be applied as if the credit allowed under this
subsection were allowed under section 2010.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 397; Pub. L. 89-809, title I,
Sec. 108(b), Nov. 13, 1966, 80 Stat. 1572; Pub. L. 94-455, title
XX, Sec. 2001(c)(1)(E)(i), Oct. 4, 1976, 90 Stat. 1851; Pub. L.
100-647, title V, Sec. 5032(b), Nov. 10, 1988, 102 Stat. 3669; Pub.
L. 104-188, title I, Sec. 1704(f)(1), Aug. 20, 1996, 110 Stat.
1879; Pub. L. 105-34, title V, Sec. 501(a)(1)(E), Aug. 5, 1997, 111
Stat. 845; Pub. L. 107-16, title V, Sec. 532(c)(7), June 7, 2001,
115 Stat. 75.)
-STATAMEND-
AMENDMENT OF SECTION
Pub. L. 107-16, title V, Sec. 532(c)(7), (d), title IX, Sec. 901,
June 7, 2001, 115 Stat. 75, 150, provided that, applicable to
estates of decedents dying, and generation-skipping transfers,
after Dec. 31, 2004, this section is temporarily amended as
follows:
(1) by amending subsection (a) to read as follows:
"(a) In general
"The tax imposed by section 2101 shall be credited with the
amounts determined in accordance with sections 2012 and 2013
(relating to gift tax and tax on prior transfers).";
(2) by striking out subsection (b) and by redesignating
subsection (c) as subsection (b); and
(3) in subsection (b)(5), by substituting "2012 and 2013" for
"2011 to 2013, inclusive,".
See Effective and Termination Dates of 2001 Amendment note below.
-MISC1-
AMENDMENTS
1997 - Subsec. (c)(3)(A). Pub. L. 105-34 substituted "the
applicable credit amount in effect under section 2010(c) for the
calendar year which includes the date of death" for "$192,800".
1996 - Subsec. (c)(3)(A). Pub. L. 104-188 inserted at end "For
purposes of the preceding sentence, property shall not be treated
as situated in the United States if such property is exempt from
the tax imposed by this subchapter under any treaty obligation of
the United States."
1988 - Subsec. (c)(1). Pub. L. 100-647, Sec. 5032(b)(1)(A),
substituted "$13,000" for "$3,600".
Subsec. (c)(2). Pub. L. 100-647, Sec. 5032(b)(1), substituted
"$13,000" for "$3,600" in subpar. (A) and "$46,800" for "$15,075"
in subpar. (B).
Subsec. (c)(3). Pub. L. 100-647, Sec. 5032(b)(2), amended par.
(3) generally, substituting provision relating to special rules for
coordination with treaties and with gift tax unified tax credit for
provision relating to a phase-in of the par. (2)(B) amount for
decedents dying during 1977, 1978, 1979, and 1980.
1976 - Subsec. (c). Pub. L. 94-455 added subsec. (c).
1966 - Pub. L. 89-809 redesignated existing provisions as subsec.
(a), inserted reference to special limitation provided in subsec.
(b), and added subsec. (b).
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Amendment by Pub. L. 107-16 applicable to estates of decedents
dying, and generation-skipping transfers, after Dec. 31, 2004, see
section 532(d) of Pub. L. 107-16, set out as a note under section
2011 of this title.
Amendment by Pub. L. 107-16 inapplicable to estates of decedents
dying, gifts made, or generation skipping transfers, after Dec. 31,
2010, and the Internal Revenue Code of 1986 to be applied and
administered to such estates, gifts, and transfers as if such
amendment had never been enacted, see section 901 of Pub. L.
107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by Pub. L. 105-34 applicable to estates of decedents
dying, and gifts made, after Dec. 31, 1997, see section 501(f) of
Pub. L. 105-34, set out as a note under section 2001 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 applicable to estates of decedents
dying after Nov. 10, 1988, see section 5032(d) of Pub. L. 100-647,
set out as a note under section 2101 of this title.
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by Pub. L. 94-455 applicable to estates of decedents
dying after Dec. 31, 1976, see section 2001(d)(1) of Pub. L.
94-455, set out as a note under section 2001 of this title.
EFFECTIVE DATE OF 1966 AMENDMENT
Amendment by Pub. L. 89-809 applicable with respect to estates of
decedents dying after Nov. 13, 1966, see section 108(i) of Pub. L.
89-809, set out as a note under section 2101 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2107, 2108 of this title.
-End-
-CITE-
26 USC Sec. 2103 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter B - Estates of Nonresidents Not Citizens
-HEAD-
Sec. 2103. Definition of gross estate
-STATUTE-
For the purpose of the tax imposed by section 2101, the value of
the gross estate of every decedent nonresident not a citizen of the
United States shall be that part of his gross estate (determined as
provided in section 2031) which at the time of his death is
situated in the United States.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 397.)
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2102, 2106, 2107 of this
title.
-End-
-CITE-
26 USC Sec. 2104 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter B - Estates of Nonresidents Not Citizens
-HEAD-
Sec. 2104. Property within the United States
-STATUTE-
(a) Stock in corporation
For purposes of this subchapter shares of stock owned and held by
a nonresident not a citizen of the United States shall be deemed
property within the United States only if issued by a domestic
corporation.
(b) Revocable transfers and transfers within 3 years of death
For purposes of this subchapter, any property of which the
decedent has made a transfer, by trust or otherwise, within the
meaning of sections 2035 to 2038, inclusive, shall be deemed to be
situated in the United States, if so situated either at the time of
the transfer or at the time of the decedent's death.
(c) Debt obligations
For purposes of this subchapter, debt obligations of -
(1) a United States person, or
(2) the United States, a State or any political subdivision
thereof, or the District of Columbia,
owned and held by a nonresident not a citizen of the United States
shall be deemed property within the United States. With respect to
estates of decedents dying after December 31, 1969, deposits with a
domestic branch of a foreign corporation, if such branch is engaged
in the commercial banking business, shall, for purposes of this
subchapter, be deemed property within the United States. This
subsection shall not apply to a debt obligation to which section
2105(b) applies or to a debt obligation of a domestic corporation
if any interest on such obligation, were such interest received by
the decedent at the time of his death, would be treated by reason
of section 861(a)(1)(A) as income from sources without the United
States.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 397; Pub. L. 89-809, title I,
Sec. 108(c), Nov. 13, 1966, 80 Stat. 1572; Pub. L. 91-172, title
IV, Sec. 435(b), Dec. 30, 1969, 83 Stat. 625; Pub. L. 93-17, Sec.
3(a)(1), Apr. 10, 1973, 87 Stat. 12; Pub. L. 93-625, Sec. 9(b),
Jan. 3, 1975, 88 Stat. 2116; Pub. L. 94-455, title XX, Sec.
2001(c)(1)(L), Oct. 4, 1976, 90 Stat. 1853; Pub. L. 100-647, title
I, Sec. 1012(q)(11), Nov. 10, 1988, 102 Stat. 3525; Pub. L.
104-188, title I, Sec. 1704(t)(38), Aug. 20, 1996, 110 Stat. 1889.)
-MISC1-
AMENDMENTS
1996 - Subsec. (c). Pub. L. 104-188 substituted "section
861(a)(1)(A)" for "subparagraph (A), (C), or (D) of section
861(a)(1)" in concluding provisions.
1988 - Subsec. (c). Pub. L. 100-647 substituted "subparagraph
(A), (C), or (D) of section 861(a)(1)" for "section 861(a)(1)(B),
section 861(a)(1)(G), or section 861(a)(1)(H)".
1976 - Subsec. (b). Pub. L. 94-455 substituted "and transfers
within 3 years of death" for "and transfers in contemplation of
death" after "Revocable transfers".
1975 - Subsec. (c). Pub. L. 93-625 inserted reference to section
861(a)(1)(H) of this title in last sentence.
1973 - Subsec. (c). Pub. L. 93-17 made subsec. (c) inapplicable
to debt obligations where interest on such obligations is treated
as income from sources without the United States by reason of
section 861(a)(1)(G) of this title.
1969 - Subsec. (c). Pub. L. 91-172 substituted "December 31,
1969" for "December 31, 1972" in provisions deeming deposit with a
domestic branch of a foreign corporation if such branch is engaged
in the commercial banking business to be property within the United
States.
1966 - Subsec. (c). Pub. L. 89-809 added subsec. (c).
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 effective, except as otherwise
provided, as if included in the provision of the Tax Reform Act of
1986, Pub. L. 99-514, to which such amendment relates, see section
1019(a) of Pub. L. 100-647, set out as a note under section 1 of
this title.
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by Pub. L. 94-455 not applicable to transfers made
before Jan. 1, 1977, see section 2001(d)(1) of Pub. L. 94-455, set
out as a note under section 2001 of this title.
EFFECTIVE DATE OF 1975 AMENDMENT
Amendment by Pub. L. 93-625 applicable with respect to estates of
decedents dying after Jan. 3, 1975, see section 9(c) of Pub. L.
93-625, set out as a note under section 861 of this title.
EFFECTIVE DATE OF 1973 AMENDMENT
Section 3(a)(2) of Pub. L. 93-17 provided that: "The amendment
made by paragraph (1) [amending this section] shall apply with
respect to estates of decedents dying after December 31, 1972,
except that in the case of the assumption of a debt obligation of a
foreign corporation which is treated as issued under section
4912(c)(2) after December 31, 1972, and before January 1, 1974, the
amendment made by paragraph (1) [amending this section] shall apply
with respect to estates of decedents dying after December 31,
1973."
EFFECTIVE DATE OF 1966 AMENDMENT
Amendment by Pub. L. 89-809 applicable with respect to estates of
decedents dying after Nov. 13, 1966, see section 108(i) of Pub. L.
89-809, set out as a note under section 2101 of this title.
SHORT TITLE OF 1973 AMENDMENT
Section 1(a) of Pub. L. 93-17 provided that: "This Act [enacting
sections 4922 and 6689 of this title, amending this section and
sections 4911, 4912, 4914, 4915, 4916, 4918, 4919, 4920, and 6611
of this title, and enacting provisions set out as notes under this
section] may be cited as the 'Interest Equalization Tax Extension
Act of 1973'."
-End-
-CITE-
26 USC Sec. 2105 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter B - Estates of Nonresidents Not Citizens
-HEAD-
Sec. 2105. Property without the United States
-STATUTE-
(a) Proceeds of life insurance
For purposes of this subchapter, the amount receivable as
insurance on the life of a nonresident not a citizen of the United
States shall not be deemed property within the United States.
(b) Bank deposits and certain other debt obligations
For purposes of this subchapter, the following shall not be
deemed property within the United States -
(1) amounts described in section 871(i)(3), if any interest
thereon would not be subject to tax by reason of section
871(i)(1) were such interest received by the decedent at the time
of his death,
(2) deposits with a foreign branch of a domestic corporation or
domestic partnership, if such branch is engaged in the commercial
banking business,
(3) debt obligations, if, without regard to whether a statement
meeting the requirements of section 871(h)(5) has been received,
any interest thereon would be eligible for the exemption from tax
under section 871(h)(1) were such interest received by the
decedent at the time of his death, and
(4) obligations which would be original issue discount
obligations as defined in section 871(g)(1) but for subparagraph
(B)(i) thereof, if any interest thereon (were such interest
received by the decedent at the time of his death) would not be
effectively connected with the conduct of a trade or business
within the United States.
Notwithstanding the preceding sentence, if any portion of the
interest on an obligation referred to in paragraph (3) would not be
eligible for the exemption referred to in paragraph (3) by reason
of section 871(h)(4) if the interest were received by the decedent
at the time of his death, then an appropriate portion (as
determined in a manner prescribed by the Secretary) of the value
(as determined for purposes of this chapter) of such debt
obligation shall be deemed property within the United States.
(c) Works of art on loan for exhibition
For purposes of this subchapter, works of art owned by a
nonresident not a citizen of the United States shall not be deemed
property within the United States if such works of art are -
(1) imported into the United States solely for exhibition
purposes,
(2) loaned for such purposes, to a public gallery or museum, no
part of the net earnings of which inures to the benefit of any
private stockholder or individual, and
(3) at the time of the death of the owner, on exhibition, or en
route to or from exhibition, in such a public gallery or museum.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 397; Pub. L. 89-809, title I,
Sec. 108(d), Nov. 13, 1966, 80 Stat. 1572; Pub. L. 98-369, div. A,
title I, Sec. 127(d), July 18, 1984, 98 Stat. 651; Pub. L. 100-647,
title I, Sec. 1012(g)(4), Nov. 10, 1988, 102 Stat. 3501; Pub. L.
103-66, title XIII, Sec. 13237(b), Aug. 10, 1993, 107 Stat. 508;
Pub. L. 105-34, title XIII, Sec. 1304(a), Aug. 5, 1997, 111 Stat.
1040.)
-MISC1-
AMENDMENTS
1997 - Subsec. (b)(4). Pub. L. 105-34 added par. (4).
1993 - Subsec. (b). Pub. L. 103-66 substituted "this subchapter,
the following shall not be deemed property within the United
States" for "this subchapter" in introductory provisions, added
par. (3) and concluding provisions, and struck out former par. (3)
and concluding provisions which read as follows:
"(3) debt obligations, if, without regard to whether a
statement meeting the requirements of section 871(h)(4) has been
received, any interest thereon would be eligible for the
exemption from tax under section 871(h)(1) were such interest
received by the decedent at the time of his death,
shall not be deemed property within the United States."
1988 - Subsec. (b)(1). Pub. L. 100-647 substituted "section
871(i)(3), if any interest thereon would not be subject to tax by
reason of section 871(i)(1)" for "section 861(c), if any interest
thereon would be treated by reason of section 861(a)(1)(A) as
income from sources without the United States".
1984 - Subsec. (b). Pub. L. 98-369, amended subsec. (b)
generally, substituting "Bank deposits and certain other debt
obligations" for "Certain bank deposits, etc." in heading and ", if
any interest thereon would be treated by reason of section
861(a)(1)(A) as income from sources without the United States were
such interest received by the decedent at the time of his death,"
for "if any interest thereon, were such interest received by the
decedent at the time of his death, would be treated by reason of
section 861(a)(1)(A) as income from sources without the United
States, and" in par. (1), inserting "and" after "business," in par.
(2), and adding par. (3).
1966 - Subsec. (b). Pub. L. 89-809 substituted amounts described
in section 861(c) if any interest thereon, were such interest
received by the decedent at the time of his death, would be treated
by reason of section 861(a)(1)(A) as income from sources without
the United States, and deposits with a foreign branch of a domestic
corporation or domestic partnership, if such branch is engaged in
the commercial banking business for moneys deposited with any
person carrying on the banking business by or for a nonresident not
a citizen of the United States who was not engaged in business in
the United States at the time of his death as the property not to
be deemed property within the United States for purposes of this
subchapter.
EFFECTIVE DATE OF 1997 AMENDMENT
Section 1304(b) of Pub. L. 105-34 provided that: "The amendment
made by this section [amending this section] shall apply to estates
of decedents dying after the date of the enactment of this Act
[Aug. 5, 1997]."
EFFECTIVE DATE OF 1993 AMENDMENT
Amendment by Pub. L. 103-66 applicable to the estates of
decedents dying after Dec. 31, 1993, see section 13237(d) of Pub.
L. 103-66, set out as a note under section 871 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 effective, except as otherwise
provided, as if included in the provision of the Tax Reform Act of
1986, Pub. L. 99-514, to which such amendment relates, see section
1019(a) of Pub. L. 100-647, set out as a note under section 1 of
this title.
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by Pub. L. 98-369 applicable to obligations issued
after July 18, 1984, with respect to the estates of decedents dying
after such date, see section 127(g)(2) of Pub. L. 98-369, set out
as a note under section 871 of this title.
EFFECTIVE DATE OF 1966 AMENDMENT
Amendment by Pub. L. 89-809 applicable with respect to estates of
decedents dying after Nov. 13, 1966, see section 108(i) of Pub. L.
89-809, set out as a note under section 2101 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in section 2104 of this title.
-End-
-CITE-
26 USC Sec. 2106 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter B - Estates of Nonresidents Not Citizens
-HEAD-
Sec. 2106. Taxable estate
-STATUTE-
(a) Definition of taxable estate
For purposes of the tax imposed by section 2101, the value of the
taxable estate of every decedent nonresident not a citizen of the
United States shall be determined by deducting from the value of
that part of his gross estate which at the time of his death is
situated in the United States -
(1) Expenses, losses, indebtedness, and taxes
That proportion of the deductions specified in sections 2053
and 2054 (other than the deductions described in the following
sentence) which the value of such part bears to the value of his
entire gross estate, wherever situated. Any deduction allowable
under section 2053 in the case of a claim against the estate
which was founded on a promise or agreement but was not
contracted for an adequate and full consideration in money or
money's worth shall be allowable under this paragraph to the
extent that it would be allowable as a deduction under paragraph
(2) if such promise or agreement constituted a bequest.
(2) Transfers for public, charitable, and religious uses
(A) In general
The amount of all bequests, legacies, devises, or transfers
(including the interest which falls into any such bequest,
legacy, devise, or transfer as a result of an irrevocable
disclaimer of a bequest, legacy, devise, transfer, or power, if
the disclaimer is made before the date prescribed for the
filing of the estate tax return) -
(i) to or for the use of the United States, any State, any
political subdivision thereof, or the District of Columbia,
for exclusively public purposes;
(ii) to or for the use of any domestic corporation
organized and operated exclusively for religious, charitable,
scientific, literary, or educational purposes, including the
encouragement of art and the prevention of cruelty to
children or animals, no part of the net earnings of which
inures to the benefit of any private stockholder or
individual, which is not disqualified for tax exemption under
section 501(c)(3) by reason of attempting to influence
legislation, and which does not participate in, or intervene
in (including the publishing or distributing of statements),
any political campaign on behalf of (or in opposition to) any
candidate for public office; or
(iii) to a trustee or trustees, or a fraternal society,
order, or association operating under the lodge system, but
only if such contributions or gifts are to be used within the
United States by such trustee or trustees, or by such
fraternal society, order, or association, exclusively for
religious, charitable, scientific, literary, or educational
purposes, or for the prevention of cruelty to children or
animals, such trust, fraternal society, order, or association
would not be disqualified for tax exemption under section
501(c)(3) by reason of attempting to influence legislation,
and such trustee or trustees, or such fraternal society,
order, or association, does not participate in, or intervene
in (including the publishing or distributing of statements),
any political campaign on behalf of (or in opposition to) any
candidate for public office;
(B) Powers of appointment
Property includible in the decedent's gross estate under
section 2041 (relating to powers of appointment) received by a
donee described in this paragraph shall, for purposes of this
paragraph, be considered a bequest of such decedent.
(C) Death taxes payable out of bequests
If the tax imposed by section 2101, or any estate,
succession, legacy, or inheritance taxes, are, either by the
terms of the will, by the law of the jurisdiction under which
the estate is administered, or by the law of the jurisdiction
imposing the particular tax, payable in whole or in part out of
the bequests, legacies, or devises otherwise deductible under
this paragraph, then the amount deductible under this paragraph
shall be the amount of such bequests, legacies, or devises
reduced by the amount of such taxes.
(D) Limitation on deduction
The amount of the deduction under this paragraph for any
transfer shall not exceed the value of the transferred property
required to be included in the gross estate.
(E) Disallowance of deductions in certain cases
The provisions of section 2055(e) shall be applied in the
determination of the amount allowable as a deduction under this
paragraph.
(F) Cross references
(i) For option as to time for valuation for purposes of
deduction under this section, see section 2032.
(ii) For exemption of certain bequests for the benefit of
the United States and for rules of construction for certain
bequests, see section 2055(g).
(iii) For treatment of gifts and bequests to or for the use
of Indian tribal governments (or their subdivisions), see
section 7871.
(3) Marital deduction
The amount which would be deductible with respect to property
situated in the United States at the time of the decedent's death
under the principles of section 2056.
(b) Condition of allowance of deductions
No deduction shall be allowed under paragraphs (1) and (2) of
subsection (a) in the case of a nonresident not a citizen of the
United States unless the executor includes in the return required
to be filed under section 6018 the value at the time of his death
of that part of the gross estate of such nonresident not situated
in the United States.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 398; Pub. L. 85-866, title I,
Sec. 30(d), Sept. 2, 1958, 72 Stat. 1631; Pub. L. 86-779, Sec.
4(c), Sept. 14, 1960, 74 Stat. 1000; Pub. L. 89-809, title I, Sec.
108(e), Nov. 13, 1966, 80 Stat. 1572; Pub. L. 91-172, title II,
Sec. 201(d)(2), (4)(B), Dec. 30, 1969, 83 Stat. 561; Pub. L.
94-455, title XIII, Sec. 1307(d)(1)(B)(iii), (C), title XIX, Sec.
1902(a)(5), (12)(A), title XX, Sec. 2001(c)(1)(F), Oct. 4, 1976,
90 Stat. 1727, 1805, 1852; Pub. L. 97-473, title II, Sec.
202(b)(6), Jan. 14, 1983, 96 Stat. 2610; Pub. L. 99-514, title XIV,
Sec. 1422(c), Oct. 22, 1986, 100 Stat. 2717; Pub. L. 100-203, title
X, Sec. 10711(a)(4), Dec. 22, 1987, 101 Stat. 1330-464; Pub. L.
100-647, title V, Sec. 5033(c), Nov. 10, 1988, 102 Stat. 3672; Pub.
L. 101-239, title VII, Sec. 7815(d)(3), Dec. 19, 1989, 103 Stat.
2415; Pub. L. 107-16, title V, Sec. 532(c)(8), June 7, 2001, 115
Stat. 75.)
-STATAMEND-
AMENDMENT OF SUBSECTION (A)
Pub. L. 107-16, title V, Sec. 532(c)(8), (d), title IX, Sec. 901,
June 7, 2001, 115 Stat. 75, 150, provided that, applicable to
estates of decedents dying, and generation-skipping transfers,
after Dec. 31, 2004, subsection (a) of this section is temporarily
amended by adding at the end the following new paragraph:
(4) State death taxes
The amount which bears the same ratio to the State death taxes
as the value of the property, as determined for purposes of this
chapter, upon which State death taxes were paid and which is
included in the gross estate under section 2103 bears to the
value of the total gross estate under section 2103. For purposes
of this paragraph, the term "State death taxes" means the taxes
described in section 2011(a).
See Effective and Termination Dates of 2001 Amendment note below.
-MISC1-
AMENDMENTS
1989 - Subsec. (a)(3). Pub. L. 101-239 struck out "allowed where
spouse is citizen" after "deduction" in heading.
1988 - Subsec. (a)(3). Pub. L. 100-647 added par. (3).
1987 - Subsec. (a)(2)(A)(ii), (iii). Pub. L. 100-203 inserted
"(or in opposition to)" after "on behalf of".
1986 - Subsec. (a)(2)(F)(ii). Pub. L. 99-514 substituted "section
2055(g)" for "section 2055(f)".
1983 - Subsec. (a)(2)(F). Pub. L. 97-473 substituted "(i)" and
"(ii)" for "(1)" and "(2)", respectively, and added cl. (iii).
1976 - Subsec. (a)(2)(A)(i). Pub. L. 94-455, Sec. 1902
(a)(12)(A), struck out "Territory" after "any State".
Subsec. (a)(2)(A)(ii). Pub. L. 94-455, Sec. 1307(d)(1)(B)(iii),
substituted "which is not disqualified for tax exemption under
section 501(c)(3) by reason of attempting to influence legislation"
for "no substantial part of the activities of which is carrying on
propaganda, or otherwise attempting, to influence legislation"
after "stockholder or individual".
Subsec. (a)(2)(A)(iii). Pub. L. 94-455, Sec. 1307(d)(1)(C),
substituted "such trust, fraternal society, order, or association
would not be disqualified for tax exemption under section 501(c)(3)
by reason of attempting to influence legislation" for "no
substantial part of the activities of such trustee or trustees, or
of such fraternal society, order, or association, is carrying on
propaganda, or otherwise attempting, to influence legislation"
after "children or animals".
Subsec. (a)(2)(F). Pub. L. 94-455, Sec. 1902(a)(5)(A),
substituted "Cross references" for "Other cross references" after
"(F)", in cl. (1) "purposes of deduction under this section" for
"purpose of deduction under this paragraph" after "valuation for",
in cl. (2) provision for exemption of certain bequests for benefit
of United States and for rules of construction for certain
bequests, for provisions of cls. (2) to (11) relating to bequests
to; Library of Congress, Post Office Department, Office of Naval
Records and Library, National Park Service, Department of State,
Department of Justice, payment of tax on bequests of United States
obligations, Naval Academy, Naval Academy Museum, and National
Archives Trust Fund Board, respectively.
Subsec. (a)(3). Pub. L. 94-455, Sec. 2001(c)(1)(F), struck out
par. (3) relating to specific exemption in case of decedents
nonresidents not citizens.
Subsec. (c). Pub. L. 94-455, Sec. 1902(a)(5)(B), struck out
subsec. (c) relating to treatment of United States bonds in
determining gross estate of a decedent who was not engaged in
business in the United States at the time of his death.
1969 - Subsec. (a)(2)(A)(ii), (iii). Pub. L. 91-172, Sec.
201(d)(4)(B), inserted non-participation and non-intervention in
political campaigns as an additional qualification.
Subsec. (a)(2)(E). Pub. L. 91-172, Sec. 201(d)(2), substituted
substantive provisions for simple reference to sections 503 and 681
of this title in which such substantive provisions were formerly
set out.
1966 - Subsec. (a)(3). Pub. L. 89-809 substituted "$30,000" for
"$2,000" as size of exemption in subpar. (A) and "$30,000" for
"$2,000" as item (i) in formula set out in subpar. (B).
1960 - Subsec. (a)(3). Pub. L. 86-779 designated existing
provisions as subpar. (A) and added subpar. (B).
1958 - Subsec. (a)(2)(E). Pub. L. 85-866 substituted "503" for
"504".
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Amendment by Pub. L. 107-16 applicable to estates of decedents
dying, and generation-skipping transfers, after Dec. 31, 2004, see
section 532(d) of Pub. L. 107-16, set out as a note under section
2011 of this title.
Amendment by Pub. L. 107-16 inapplicable to estates of decedents
dying, gifts made, or generation skipping transfers, after Dec. 31,
2010, and the Internal Revenue Code of 1986 to be applied and
administered to such estates, gifts, and transfers as if such
amendment had never been enacted, see section 901 of Pub. L.
107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1989 AMENDMENT
Amendment by Pub. L. 101-239 effective, except as otherwise
provided, as if included in the provision of the Technical and
Miscellaneous Revenue Act of 1988, Pub. L. 100-647, to which such
amendment relates, see section 7817 of Pub. L. 101-239, set out as
a note under section 1 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 applicable to estates of decedents
dying after Nov. 10, 1988, see section 5033(d)(1) of Pub. L.
100-647, set out as a note under section 2056 of this title.
EFFECTIVE DATE OF 1987 AMENDMENT
Amendment by Pub. L. 100-203 applicable with respect to
activities after Dec. 22, 1987, see section 10711(c) of Pub. L.
100-203, set out as a note under section 170 of this title.
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by Pub. L. 99-514 applicable to transfers and
contributions made after Dec. 31, 1986, see section 1422(e) of Pub.
L. 99-514, set out as a note under section 2055 of this title.
EFFECTIVE DATE OF 1983 AMENDMENT
For effective date of amendment by Pub. L. 97-473, see section
204(3) of Pub. L. 97-473, set out as an Effective Date note under
section 7871 of this title.
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 1902(a)(5) of Pub. L. 94-455 applicable in
the case of estates of decedents dying after Oct. 4, 1976, see
section 1902(c)(1) of Pub. L. 94-455, set out as a note under
section 2011 of this title.
Amendment by section 2001(c)(1)(F) of Pub. L. 94-455 applicable
to estates of decedents dying after Dec. 31, 1976, see section
2001(d)(1) of Pub. L. 94-455, set out as a note under section 2001
of this title.
EFFECTIVE DATE OF 1969 AMENDMENT
Amendment by section 201(d)(2) of Pub. L. 91-172 applicable in
the case of decedents dying after Dec. 31, 1969, with specified
exceptions, see section 201(g)(4) of Pub. L. 91-172, set out as a
note under section 170 of this title.
Amendment by section 201(d)(4)(B) of Pub. L. 91-172 applicable to
gifts and transfers made after Dec. 31, 1969, see section 201(g)(4)
of Pub. L. 91-172, set out as a note under section 170 of this
title.
EFFECTIVE DATE OF 1966 AMENDMENT
Amendment by Pub. L. 89-809 applicable with respect to estates of
decedents dying after Nov. 13, 1966, see section 108(i) of Pub. L.
89-809, set out as a note under section 2101 of this title.
EFFECTIVE DATE OF 1960 AMENDMENT
Section 4(e)(2) of Pub. L. 86-779 provided that: "The amendments
made by subsections (b) and (c) [enacting section 2209 of this
title and amending this section] shall apply with respect to
estates of decedents dying after the date of the enactment of this
Act [Sept. 14, 1960]."
APPLICATION OF AMENDMENTS BY SECTION 5033 OF PUB. L. 100-647 TO
ESTATES OF, OR GIFTS BY, NONCITIZEN AND NONRESIDENT INDIVIDUALS
For provisions directing that in the case of the estate of, or
gift by, an individual who was not a citizen or resident of the
United States but was a resident of a foreign country with which
the United States has a tax treaty with respect to estate,
inheritance, or gift taxes, the amendments made by section 5033 of
Pub. L. 100-647 shall not apply to the extent such amendments would
be inconsistent with the provisions of such treaty relating to
estate, inheritance, or gift tax marital deductions, but that in
the case of the estate of an individual dying before the date 3
years after Dec. 19, 1989, or a gift by an individual before the
date 3 years after Dec. 19, 1989, the requirement of the preceding
provision that the individual not be a citizen or resident of the
United States shall not apply, see section 7815(d)(14) of Pub. L.
101-239, set out as a note under section 2056 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 170, 303, 501, 508, 2011,
2012, 2013, 2032, 2053, 2101, 2107, 2108, 2701, 4947, 4948, 7871 of
this title; title 22 section 3307.
-End-
-CITE-
26 USC Sec. 2107 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter B - Estates of Nonresidents Not Citizens
-HEAD-
Sec. 2107. Expatriation to avoid tax
-STATUTE-
(a) Treatment of expatriates
(1) Rate of tax
A tax computed in accordance with the table contained in
section 2001 is hereby imposed on the transfer of the taxable
estate, determined as provided in section 2106, of every decedent
nonresident not a citizen of the United States if, within the
10-year period ending with the date of death, such decedent lost
United States citizenship, unless such loss did not have for one
of its principal purposes the avoidance of taxes under this
subtitle or subtitle A.
(2) Certain individuals treated as having tax avoidance purpose
(A) In general
For purposes of paragraph (1), an individual shall be treated
as having a principal purpose to avoid such taxes if such
individual is so treated under section 877(a)(2).
(B) Exception
Subparagraph (A) shall not apply to a decedent meeting the
requirements of section 877(c)(1).
(b) Gross estate
For purposes of the tax imposed by subsection (a), the value of
the gross estate of every decedent to whom subsection (a) applies
shall be determined as provided in section 2103, except that -
(1) if such decedent owned (within the meaning of section
958(a)) at the time of his death 10 percent or more of the total
combined voting power of all classes of stock entitled to vote of
a foreign corporation, and
(2) if such decedent owned (within the meaning of section
958(a)), or is considered to have owned (by applying the
ownership rules of section 958(b)), at the time of his death,
more than 50 percent of -
(A) the total combined voting power of all classes of stock
entitled to vote of such corporation, or
(B) the total value of the stock of such corporation,
then that proportion of the fair market value of the stock of such
foreign corporation owned (within the meaning of section 958(a)) by
such decedent at the time of his death, which the fair market value
of any assets owned by such foreign corporation and situated in the
United States, at the time of his death, bears to the total fair
market value of all assets owned by such foreign corporation at the
time of his death, shall be included in the gross estate of such
decedent. For purposes of the preceding sentence, a decedent shall
be treated as owning stock of a foreign corporation at the time of
his death if, at the time of a transfer, by trust or otherwise,
within the meaning of sections 2035 to 2038, inclusive, he owned
such stock.
(c) Credits
(1) Unified credit
(A) In general
A credit of $13,000 shall be allowed against the tax imposed
by subsection (a).
(B) Limitation based on amount of tax
The credit allowed under this paragraph shall not exceed the
amount of the tax imposed by subsection (a).
(2) Credit for foreign death taxes
(A) In general
The tax imposed by subsection (a) shall be credited with the
amount of any estate, inheritance, legacy, or succession taxes
actually paid to any foreign country in respect of any property
which is included in the gross estate solely by reason of
subsection (b).
(B) Limitation on credit
The credit allowed by subparagraph (A) for such taxes paid to
a foreign country shall not exceed the lesser of -
(i) the amount which bears the same ratio to the amount of
such taxes actually paid to such foreign country as the value
of the property subjected to such taxes by such foreign
country and included in the gross estate solely by reason of
subsection (b) bears to the value of all property subjected
to such taxes by such foreign country, or
(ii) such property's proportionate share of the excess of -
(I) the tax imposed by subsection (a), over
(II) the tax which would be imposed by section 2101 but
for this section.
(C) Proportionate share
In the case of property which is included in the gross estate
solely by reason of subsection (b), such property's
proportionate share is the percentage which the value of such
property bears to the total value of all property included in
the gross estate solely by reason of subsection (b).
(3) Other credits
The tax imposed by subsection (a) shall be credited with the
amounts determined in accordance with subsections (a) and (b) of
section 2102. For purposes of subsection (a) of section 2102,
sections 2011 to 2013, inclusive, shall be applied as if the
credit allowed under paragraph (1) were allowed under section
2010.
(d) Burden of proof
If the Secretary establishes that it is reasonable to believe
that an individual's loss of United States citizenship would, but
for this section, result in a substantial reduction in the estate,
inheritance, legacy, and succession taxes in respect of the
transfer of his estate, the burden of proving that such loss of
citizenship did not have for one of its principal purposes the
avoidance of taxes under this subtitle or subtitle A shall be on
the executor of such individual's estate.
(e) Cross reference
For comparable treatment of long-term lawful permanent
residents who ceased to be taxed as residents, see section
877(e).
-SOURCE-
(Added Pub. L. 89-809, title I, Sec. 108(f), Nov. 13, 1966, 80
Stat. 1573; amended Pub. L. 94-455, title XIX, Secs. 1902(a)(6),
1906(b)(13)(A), title XX, Sec. 2001(c)(1)(E)(ii), Oct. 4, 1976, 90
Stat. 1805, 1834, 1851; Pub. L. 104-191, title V, Sec. 511(e)(1),
(f)(2)(A), Aug. 21, 1996, 110 Stat. 2097, 2099; Pub. L. 105-34,
title XVI, Sec. 1602(g)(6), Aug. 5, 1997, 111 Stat. 1095; Pub. L.
107-16, title V, Sec. 532(c)(7)(C), June 7, 2001, 115 Stat. 75.)
-STATAMEND-
AMENDMENT OF SUBSECTION (C)(3)
Pub. L. 107-16, title V, Sec. 532(c)(7)(C), (d), title IX, Sec.
901, June 7, 2001, 115 Stat. 75, 150, provided that, applicable to
estates of decedents dying, and generation-skipping transfers,
after Dec. 31, 2004, subsection (c)(3) of this section is
temporarily amended by substituting "2012 and 2013" for "2011 to
2013, inclusive,". See Effective and Termination Dates of 2001
Amendment note below.
-MISC1-
AMENDMENTS
1997 - Subsec. (c)(2)(B)(i). Pub. L. 105-34, Sec. 1602(g)(6)(A),
substituted "such foreign country as the value of the property
subjected to such taxes by such foreign country and" for "such
foreign country in respect of property included in the gross estate
as the value of the property".
Subsec. (c)(2)(C). Pub. L. 105-34, Sec. 1602(g)(6)(B), amended
heading and text of subpar. (C) generally. Prior to amendment, text
read as follows: "For purposes of subparagraph (B), a property's
proportionate share is the percentage of the value of the property
which is included in the gross estate solely by reason of
subsection (b) bears to the total value of the gross estate."
1996 - Subsec. (a). Pub. L. 104-191, Sec. 511(e)(1)(A),
substituted "Treatment of expatriates" for "Rate of tax" in heading
and amended text generally. Prior to amendment, text read as
follows: "A tax computed in accordance with the table contained in
section 2001 is hereby imposed on the transfer of the taxable
estate, determined as provided in section 2106, of every decedent
nonresident not a citizen of the United States dying after November
13, 1966, if after March 8, 1965, and within the 10-year period
ending with the date of death such decedent lost United States
citizenship, unless such loss did not have for one of its principal
purposes the avoidance of taxes under this subtitle or subtitle A."
Subsec. (b)(2). Pub. L. 104-191, Sec. 511(e)(1)(C), substituted
"more than 50 percent of - " for "more than 50 percent of the total
combined voting power of all classes of stock entitled to vote of
such foreign corporation," and added subpars. (A) and (B).
Subsec. (c)(2), (3). Pub. L. 104-191, Sec. 511(e)(1)(B), added
par. (2) and redesignated former par. (2) as (3).
Subsec. (d). Pub. L. 104-191, Sec. 511(f)(2)(A), redesignated
subsec. (e) as (d) and struck out former subsec. (d) which read as
follows:
"(d) Exception for Loss of Citizenship for Certain Causes. -
Subsection (a) shall not apply to the transfer of the estate of a
decedent whose loss of United States citizenship resulted from the
application of section 301(b), 350, or 355 of the Immigration and
Nationality Act, as amended (8 U.S.C. 1401(b), 1482, or 1487)."
Subsec. (e). Pub. L. 104-191, Sec. 511(f)(2)(A), added subsec.
(e). Former subsec. (e) redesignated (d).
1976 - Subsec. (a). Pub. L. 94-455, Sec. 1902(a)(6), substituted
"November 13, 1966" for "the date of enactment of this section"
after "dying after".
Subsec. (c). Pub. L. 94-455, Sec. 2001(c)(1)(E)(ii), substituted
provisions relating to unified credit for "The tax imposed by
subsection (a) shall be credited with the amounts determined in
accordance with section 2102."
Subsec. (e). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out "or
his delegate" after "Secretary".
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Amendment by Pub. L. 107-16 applicable to estates of decedents
dying, and generation-skipping transfers, after Dec. 31, 2004, see
section 532(d) of Pub. L. 107-16, set out as a note under section
2011 of this title.
Amendment by Pub. L. 107-16 inapplicable to estates of decedents
dying, gifts made, or generation skipping transfers, after Dec. 31,
2010, and the Internal Revenue Code of 1986 to be applied and
administered to such estates, gifts, and transfers as if such
amendment had never been enacted, see section 901 of Pub. L.
107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by Pub. L. 105-34 effective as if included in the
provisions of the Health Insurance Portability and Accountability
Act of 1996, Pub. L. 104-191, to which such amendment relates, see
section 1602(i) of Pub. L. 105-34, set out as a note under section
26 of this title.
EFFECTIVE DATE OF 1996 AMENDMENT
Amendment by Pub. L. 104-191 applicable to individuals losing
United States citizenship on or after Feb. 6, 1995, and to
long-term residents of the United States with respect to whom an
event described in section 877(e)(1)(A) or (B) of this title occurs
on or after Feb. 6, 1995, with special rule for certain individuals
who performed an act of expatriation specified in section
1481(a)(1)-(4) of Title 8, Aliens and Nationality, before Feb. 6,
1995, see section 511(g) of Pub. L. 104-191, set out as a note
under section 877 of this title.
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 1902(a)(6) of Pub. L. 94-455 applicable in
the case of estates of decedents dying after Oct. 4, 1976, see
section 1902(c)(1) of Pub. L. 94-455, set out as a note under
section 2011 of this title.
Amendment by section 2001(c)(1)(E)(ii) of Pub. L. 94-455
applicable to estates of decedents dying after Dec. 31, 1976, see
section 2001(d)(1) of Pub. L. 94-455, set out as a note under
section 2001 of this title.
EFFECTIVE DATE
Section applicable with respect to estates of decedents dying
after Nov. 13, 1966, see section 108(i) of Pub. L. 89-809, set out
as an Effective Date of 1966 Amendment note under section 2101 of
this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 877, 2101 of this title.
-End-
-CITE-
26 USC Sec. 2108 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter B - Estates of Nonresidents Not Citizens
-HEAD-
Sec. 2108. Application of pre-1967 estate tax provisions
-STATUTE-
(a) Imposition of more burdensome tax by foreign country
Whenever the President finds that -
(1) under the laws of any foreign country, considering the tax
system of such foreign country, a more burdensome tax is imposed
by such foreign country on the transfer of estates of decedents
who were citizens of the United States and not residents of such
foreign country than the tax imposed by this subchapter on the
transfer of estates of decedents who were residents of such
foreign country,
(2) such foreign country, when requested by the United States
to do so, has not acted to revise or reduce such tax so that it
is no more burdensome than the tax imposed by this subchapter on
the transfer of estates of decedents who were residents of such
foreign country, and
(3) it is in the public interest to apply pre-1967 tax
provisions in accordance with this section to the transfer of
estates of decedents who were residents of such foreign country,
the President shall proclaim that the tax on the transfer of the
estate of every decedent who was a resident of such foreign country
at the time of his death shall, in the case of decedents dying
after the date of such proclamation, be determined under this
subchapter without regard to amendments made to sections 2101
(relating to tax imposed), 2102 (relating to credits against tax),
2106 (relating to taxable estate), and 6018 (relating to estate tax
returns) on or after November 13, 1966.
(b) Alleviation of more burdensome tax
Whenever the President finds that the laws of any foreign country
with respect to which the President has made a proclamation under
subsection (a) have been modified so that the tax on the transfer
of estates of decedents who were citizens of the United States and
not residents of such foreign country is no longer more burdensome
than the tax imposed by this subchapter on the transfer of estates
of decedents who were residents of such foreign country, he shall
proclaim that the tax on the transfer of the estate of every
decedent who was a resident of such foreign country at the time of
his death shall, in the case of decedents dying after the date of
such proclamation, be determined under this subchapter without
regard to subsection (a).
(c) Notification of Congress required
No proclamation shall be issued by the President pursuant to this
section unless, at least 30 days prior to such proclamation, he has
notified the Senate and the House of Representatives of his
intention to issue such proclamation.
(d) Implementation by regulations
The Secretary shall prescribe such regulations as may be
necessary or appropriate to implement this section.
-SOURCE-
(Added Pub. L. 89-809, title I, Sec. 108(f), Nov. 13, 1966, 80
Stat. 1573; amended Pub. L. 94-455, title XIX, Secs. 1902(a)(6),
1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1805, 1834.)
-MISC1-
AMENDMENTS
1976 - Subsec. (a). Pub. L. 94-455, Sec. 1902(a)(6), substituted
"November 13, 1976" for "the date of enactment of this section"
after "on or after".
Subsec. (d). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out "or
his delegate" after "Secretary".
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 1902(a)(6) of Pub. L. 94-455 applicable in
the case of estates of decedents dying after Oct. 4, 1976, see
section 1902(c)(1) of Pub. L. 94-455, set out as a note under
section 2011 of this title.
EFFECTIVE DATE
Section applicable with respect to estates of decedents dying
after Nov. 13, 1966, see section 108(i) of Pub. L. 89-809, set out
as an Effective Date of 1966 Amendment note under section 2101 of
this title.
-End-
-CITE-
26 USC Subchapter C - Miscellaneous 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter C - Miscellaneous
-HEAD-
SUBCHAPTER C - MISCELLANEOUS
-MISC1-
Sec.
2201. Combat zone-related deaths of members of the Armed
Forces, deaths of astronauts, and deaths of victims
of certain terrorist attacks.
[2202. Repealed.]
2203. Definition of executor.
2204. Discharge of fiduciary from personal liability.
2205. Reimbursement out of estate.
2206. Liability of life insurance beneficiaries.
2207. Liability of recipient of property over which decedent
had power of appointment.
2207A. Right of recovery in the case of certain marital
deduction property.
2207B. Right of recovery where decedent retained interest.
2208. Certain residents of possessions considered citizens
of the United States.
2209. Certain residents of possessions considered
nonresidents not citizens of the United States.
2210. Termination.
AMENDMENTS
2003 - Pub. L. 108-121, title I, Sec. 110(c)(2)(B), Nov. 11,
2003, 117 Stat. 1342, inserted ", deaths of astronauts," after
"Forces" in item 2201.
2002 - Pub. L. 107-134, title I, Sec. 103(c), Jan. 23, 2002, 115
Stat. 2431, substituted "Combat zone-related deaths of members of
the Armed Forces and deaths of victims of certain terrorist
attacks." for "Members of the Armed Forces dying in combat zone or
by reason of combat-zone-incurred wounds, etc." in item 2201.
2001 - Pub. L. 107-16, title V, Sec. 501(c)(1), June 7, 2001, 115
Stat. 69, added item 2210.
1989 - Pub. L. 101-239, title VII, Sec. 7304(b)(2)(C), Dec. 19,
1989, 103 Stat. 2353, struck out item 2210 "Liability for payment
in case of transfer of employer securities to an employee stock
ownership plan or a worker-owned cooperative".
1988 - Pub. L. 100-647, title III, Sec. 3031(f)(2), Nov. 10,
1988, 102 Stat. 3638, added item 2207B.
1984 - Pub. L. 98-369, div. A, title V, Sec. 544(b)(2), July 18,
1984, 98 Stat. 894, added item 2210.
1981 - Pub. L. 97-34, title IV, Sec. 403(d)(4)(B), Aug. 13, 1981,
95 Stat. 305, added item 2207A.
1976 - Pub. L. 94-455, title XIX, Sec. 1902(b)(1), Oct. 4, 1976,
90 Stat. 1806, struck out item 2202 "Missionaries in foreign
service".
1975 - Pub. L. 93-597, Sec. 6(b)(3), Jan. 2, 1975, 88 Stat. 1953,
substituted "Members of the Armed Forces dying in combat zone or by
reason of combat-zone-incurred wounds, etc." for "Members of the
Armed Forces dying during an induction period." in item 2201.
1970 - Pub. L. 91-614, title I, Sec. 101(d)(3), Dec. 31, 1970, 84
Stat. 1837, substituted "Discharge of fiduciary from personal
liability" for "Discharge of executor from personal liability" in
item 2204.
1960 - Pub. L. 86-779, Sec. 4(b)(2), Sept. 14, 1960, 74 Stat.
1000, added item 2209.
1958 - Pub. L. 85-866, title I, Sec. 102(c)(4), Sept. 2, 1958, 72
Stat. 1675, added item 2208.
-End-
-CITE-
26 USC Sec. 2201 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter C - Miscellaneous
-HEAD-
Sec. 2201. Combat zone-related deaths of members of the Armed
Forces, deaths of astronauts, and deaths of victims of certain
terrorist attacks
-STATUTE-
(a) In general
Unless the executor elects not to have this section apply, in
applying sections 2001 and 2101 to the estate of a qualified
decedent, the rate schedule set forth in subsection (c) shall be
deemed to be the rate schedule set forth in section 2001(c).
(b) Qualified decedent
For purposes of this section, the term "qualified decedent" means
-
(1) any citizen or resident of the United States dying while in
active service of the Armed Forces of the United States, if such
decedent -
(A) was killed in action while serving in a combat zone, as
determined under section 112(c), or
(B) died as a result of wounds, disease, or injury suffered
while serving in a combat zone (as determined under section
112(c)), and while in the line of duty, by reason of a hazard
to which such decedent was subjected as an incident of such
service,
(2) any specified terrorist victim (as defined in section
692(d)(4)), and
(3) any astronaut whose death occurs in the line of duty.
(c) Rate schedule
If the amount with respect The tentative tax is:
to which the tentative tax
to be computed is:
--------------------------------------------------------------------
Not over $150,000 1 percent of the amount by which
such amount exceeds $100,000.
Over $150,000 but not over $500 plus 2 percent of the excess
$200,000 over $150,000.
Over $200,000 but not over $1,500 plus 3 percent of the excess
$300,000 over $200,000.
Over $300,000 but not over $4,500 plus 4 percent of the excess
$500,000 over $300,000.
Over $500,000 but not over $12,500 plus 5 percent of the
$700,000 excess over $500,000.
Over $700,000 but not over $22,500 plus 6 percent of the
$900,000 excess over $700,000.
Over $900,000 but not over $34,500 plus 7 percent of the
$1,100,000 excess over $900,000.
Over $1,100,000 but not $48,500 plus 8 percent of the
over $1,600,000 excess over $1,100,000.
Over $1,600,000 but not $88,500 plus 9 percent of the
over $2,100,000 excess over $1,600,000.
Over $2,100,000 but not $133,500 plus 10 percent of the
over $2,600,000 excess over $2,100,000.
Over $2,600,000 but not $183,500 plus 11 percent of the
over $3,100,000 excess over $2,600,000.
Over $3,100,000 but not $238,500 plus 12 percent of the
over $3,600,000 excess over $3,100,000.
Over $3,600,000 but not $298,500 plus 13 percent of the
over $4,100,000 excess over $3,600,000.
Over $4,100,000 but not $363,500 plus 14 percent of the
over $5,100,000 excess over $4,100,000.
Over $5,100,000 but not $503,500 plus 15 percent of the
over $6,100,000 excess over $5,100,000.
Over $6,100,000 but not $653,500 plus 16 percent of the
over $7,100,000 excess over $6,100,000.
Over $7,100,000 but not $813,500 plus 17 percent of the
over $8,100,000 excess over $7,100,000.
Over $8,100,000 but not $983,500 plus 18 percent of the
over $9,100,000 excess over $8,100,000.
Over $9,100,000 but not $1,163,500 plus 19 percent of the
over $10,100,000 excess over $9,100,000.
Over $10,100,000 $1,353,500 plus 20 percent of the
excess over $10,100,000.
--------------------------------------------------------------------
(d) Determination of unified credit
In the case of an estate to which this section applies,
subsection (a) shall not apply in determining the credit under
section 2010.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 401; Pub. L. 93-597, Sec.
6(b)(1), (2), Jan. 2, 1975, 88 Stat. 1953; Pub. L. 94-455, title
XIX, Sec. 1902(a)(7)(A), Oct. 4, 1976, 90 Stat. 1805; Pub. L.
107-16, title V, Sec. 532(c)(9), June 7, 2001, 115 Stat. 75; Pub.
L. 107-134, title I, Sec. 103(a), (b)(3), Jan. 23, 2002, 115 Stat.
2430, 2431; Pub. L. 108-121, title I, Sec. 110(c)(1), (2)(A), Nov.
11, 2003, 117 Stat. 1342.)
-MISC1-
AMENDMENTS
2003 - Pub. L. 108-121, Sec. 110(c)(2)(A), inserted ", deaths of
astronauts," after "Forces" in section catchline.
Subsec. (b)(3). Pub. L. 108-121, Sec. 110(c)(1), added par. (3).
2002 - Pub. L. 107-134 amended section catchline and text of
section generally, substituting present provisions for provisions
which had stated that the additional estate tax as defined in
former section 2011(d) should not apply to the transfer of the
taxable estate of a citizen or resident of the United States dying
while in active service as a member of the Armed Forces of the
United States, if such decedent was killed in action while serving
in a combat zone, as determined under section 112(c), or died as a
result of wounds, disease, or injury suffered, while serving in a
combat zone (as determined under section 112(c)), and while in line
of duty, by reason of a hazard to which he was subjected as an
incident of such service.
2001 - Pub. L. 107-16, Secs. 532(c)(9)(B), 901, which temporarily
added concluding provisions which read as follows: "For purposes of
this section, the additional estate tax is the difference between
the tax imposed by section 2001 or 2101 and the amount equal to 125
percent of the maximum credit provided by section 2011(b), as in
effect before its repeal by the Economic Growth and Tax Relief
Reconciliation Act of 2001.", was repealed by Pub. L. 107-134, Sec.
103(b)(3). See Effective and Termination Dates of 2001 Amendment
and Effective Date of 2002 Amendment notes below.
Pub. L. 107-16, Secs. 532(c)(9)(A), 901, which temporarily struck
out "as defined in section 2011(d)" after "The additional estate
tax" in introductory provisions, was repealed by Pub. L. 107-134,
Sec. 103(b)(3). See Effective and Termination Dates of 2001
Amendment and Effective Date of 2002 Amendment notes below.
1975 - Pub. L. 93-597, as amended by Pub. L. 94-455, Sec.
1902(a)(7)(A), struck out "during an induction period (as defined
in section 112(c)(5))" after "resident of the United States dying",
and substituted "Members of the Armed Forces dying in combat zone
or by reason of combat-zone-incurred wounds, etc." for "Members of
the Armed Forces dying during an induction period" in section
catchline.
EFFECTIVE DATE OF 2003 AMENDMENT
Pub. L. 108-121, title I, Sec. 110(c)(3), Nov. 11, 2003, 117
Stat. 1343, provided that: "The amendments made by this subsection
[amending this section] shall apply to estates of decedents dying
after December 31, 2002."
EFFECTIVE DATE OF 2002 AMENDMENT
Amendment by Pub. L. 107-134 applicable to estates of decedents
dying on or after Sept. 11, 2001, and, in the case of individuals
dying as a result of the Apr. 19, 1995, terrorist attack, dying on
or after Apr. 19, 1995, with provisions relating to waiver of
limitations, see section 103(d) of Pub. L. 107-134, set out as a
note under section 2011 of this title.
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Amendment by Pub. L. 107-16 applicable to estates of decedents
dying, and generation-skipping transfers, after Dec. 31, 2004, see
section 532(d) of Pub. L. 107-16, set out as a note under section
2011 of this title.
Amendment by Pub. L. 107-16 inapplicable to estates of decedents
dying, gifts made, or generation skipping transfers, after Dec. 31,
2010, and the Internal Revenue Code of 1986 to be applied and
administered to such estates, gifts, and transfers as if such
amendment had never been enacted, see section 901 of Pub. L.
107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1976 AMENDMENT
Section 1902(a)(7)(B) of Pub. L. 94-455 provided that: "The
amendment made by subsection (A) [amending section 6(b)(1) of Pub.
L. 93-597] is effective July 1, 1973."
EFFECTIVE DATE OF 1975 AMENDMENT
Section 6(c) of Pub. L. 93-597 provided that: "The amendments
made by this section [amending this section and section 1034 of
this title] shall take effect on July 1, 1973."
-End-
-CITE-
26 USC Sec. 2202 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter C - Miscellaneous
-HEAD-
[Sec. 2202. Repealed. Pub. L. 94-455, title XIX, Sec. 1902(a)(8),
Oct. 4, 1976, 90 Stat. 1805]
-MISC1-
Section, acts Aug. 16, 1954, ch. 736, 68A Stat. 401; June 25,
1959, Pub. L. 86-70, Sec. 22(a), 73 Stat. 146; July 12, 1960, Pub.
L. 86-624, Sec. 18(b), 74 Stat. 416, related to the presumption
that missionaries duly commissioned and serving under boards of
foreign missions are residents of the State or the District of
Columbia wherein they resided at the time of their commission and
departure for service.
EFFECTIVE DATE OF REPEAL
Repeal applicable to estates of decedents dying after Oct. 4,
1976, see section 1902(c)(1) of Pub. L. 94-455, set out as an
Effective Date of 1976 Amendment note under section 2011 of this
title.
-End-
-CITE-
26 USC Sec. 2203 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter C - Miscellaneous
-HEAD-
Sec. 2203. Definition of executor
-STATUTE-
The term "executor" wherever it is used in this title in
connection with the estate tax imposed by this chapter means the
executor or administrator of the decedent, or, if there is no
executor or administrator appointed, qualified, and acting within
the United States, then any person in actual or constructive
possession of any property of the decedent.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 401.)
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2652, 6036 of this title.
-End-
-CITE-
26 USC Sec. 2204 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter C - Miscellaneous
-HEAD-
Sec. 2204. Discharge of fiduciary from personal liability
-STATUTE-
(a) General rule
If the executor makes written application to the Secretary for
determination of the amount of the tax and discharge from personal
liability therefor, the Secretary (as soon as possible, and in any
event within 9 months after the making of such application, or, if
the application is made before the return is filed, then within 9
months after the return is filed, but not after the expiration of
the period prescribed for the assessment of the tax in section
6501) shall notify the executor of the amount of the tax. The
executor, on payment of the amount of which he is notified (other
than any amount the time for payment of which is extended under
sections 6161, 6163, or 6166), and on furnishing any bond which may
be required for any amount for which the time for payment is
extended, shall be discharged from personal liability for any
deficiency in tax thereafter found to be due and shall be entitled
to a receipt or writing showing such discharge.
(b) Fiduciary other than the executor
If a fiduciary (not including a fiduciary in respect of the
estate of a nonresident decedent) other than the executor makes
written application to the Secretary for determination of the
amount of any estate tax for which the fiduciary may be personally
liable, and for discharge from personal liability therefor, the
Secretary upon the discharge of the executor from personal
liability under subsection (a), or upon the expiration of 6 months
after the making of such application by the fiduciary, if later,
shall notify the fiduciary (1) of the amount of such tax for which
it has been determined the fiduciary is liable, or (2) that it has
been determined that the fiduciary is not liable for any such tax.
Such application shall be accompanied by a copy of the instrument,
if any, under which such fiduciary is acting, a description of the
property held by the fiduciary, and such other information for
purposes of carrying out the provisions of this section as the
Secretary may require by regulations. On payment of the amount of
such tax for which it has been determined the fiduciary is liable
(other than any amount the time for payment of which has been
extended under section 6161, 6163, or 6166), and on furnishing any
bond which may be required for any amount for which the time for
payment has been extended, or on receipt by him of notification of
a determination that he is not liable for any such tax, the
fiduciary shall be discharged from personal liability for any
deficiency in such tax thereafter found to be due and shall be
entitled to a receipt or writing evidencing such discharge.
(c) Special lien under section 6324A
For purposes of the second sentence of subsection (a) and the
last sentence of subsection (b), an agreement which meets the
requirements of section 6324A (relating to special lien for estate
tax deferred under section 6166) shall be treated as the furnishing
of bond with respect to the amount for which the time for payment
has been extended under section 6166.
(d) Good faith reliance on gift tax returns
If the executor in good faith relies on gift tax returns
furnished under section 6103(e)(3) for determining the decedent's
adjusted taxable gifts, the executor shall be discharged from
personal liability with respect to any deficiency of the tax
imposed by this chapter which is attributable to adjusted taxable
gifts which -
(1) are made more than 3 years before the date of the
decedent's death, and
(2) are not shown on such returns.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 401; Pub. L. 91-614, title I,
Sec. 101(d)(1), (f), Dec. 31, 1970, 84 Stat. 1836, 1838; Pub. L.
94-455, title XIX, Secs. 1902(a)(9), 1906(b)(13)(A), title XX, Sec.
2004(d)(2), (f)(4), (6), Oct. 4, 1976, 90 Stat. 1805, 1834, 1870,
1872; Pub. L. 95-600, title VII, Sec. 702(p)(1), Nov. 6, 1978, 92
Stat. 2937; Pub. L. 97-34, title IV, Sec. 422(e)(1), (3), Aug. 13,
1981, 95 Stat. 316.)
-MISC1-
AMENDMENTS
1981 - Subsecs. (a) to (c). Pub. L. 97-34, Sec. 422(e)(1), (3),
struck out reference to section 6166A in subsecs. (a) and (b), and
two such references in subsec. (c).
1978 - Subsec. (d). Pub. L. 95-600 added subsec. (d).
1976 - Subsec. (a). Pub. L. 94-455, Secs. 1906(b)(13)(A),
2004(f)(6), substituted "6166 or 6166A" for "or 6166" after "6161,
6163" and struck out "or his delegate" in two places after
"Secretary".
Subsec. (b). Pub. L. 94-455, Secs. 1902(a)(9), 1906(b)(13)(A),
2004(f)(4), (6), substituted "6166 or 6166A" for "or 6166" after
"6161, 6163", "has been" for "has not been" after "payment of
which", and struck out "or his delegate" after "Secretary".
Subsec. (c). Pub. L. 94-455, Sec. 2004(d)(2), added subsec. (c).
1970 - Pub. L. 91-614, Sec. 101(d)(1)(A), substituted "fiduciary"
for "executor" in section catchline.
Subsec. (a). Pub. L. 91-614, Secs. 101(d)(1)(B), (C), (f),
designated existing provisions as subsec. (a), inserted "General
Rule - " immediately preceding first sentence and permitted a
discharge of the executor even where an extension of time has been
granted under sections 6161, 6163, or 6166 of this title, where a
bond, if required, is provided to assure payment of taxes for which
the extension was granted, and substituted "9 months" for "1 year"
in two places.
Subsec. (b). Pub. L. 91-614, Sec. 101(d)(1)(D), added subsec.
(b).
EFFECTIVE DATE OF 1981 AMENDMENT
Amendment by Pub. L. 97-34 applicable to estates of decedents
dying after Dec. 31, 1981, see section 422(f)(1) of Pub. L. 97-34,
set out as a note under section 6166 of this title.
EFFECTIVE DATE OF 1978 AMENDMENT
Section 702(p)(2) of Pub. L. 95-600 provided that: "The amendment
made by paragraph (1) [amending this section] shall apply with
respect to the estates of decedents dying after December 31, 1976."
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 1902(a)(9) of Pub. L. 94-455 applicable in
the case of estates of decedents dying after Dec. 31, 1970, see
section 1902(c)(1) of Pub. L. 94-455, set out as a note under
section 2011 of this title.
Amendment by section 2004(d)(4) of Pub. L. 94-455 applicable to
estates of decedents dying after Dec. 31, 1976, see section 2004(g)
of Pub. L. 94-455, set out as a note under section 6166 of this
title.
EFFECTIVE DATE OF 1970 AMENDMENT
Amendment by section 101(d)(1) of Pub. L. 91-614 applicable with
respect to decedents dying after Dec. 31, 1970, see section 101(j)
of Pub. L. 91-614, set out as a note under section 2032 of this
title.
Section 101(f) of Pub. L. 91-614 provided that the amendment made
by that section is effective with respect to the estates of
decedents dying after Dec. 31, 1973.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2056A, 6040, 6314, 6324,
6324A, 6504, 6905 of this title.
-End-
-CITE-
26 USC Sec. 2205 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter C - Miscellaneous
-HEAD-
Sec. 2205. Reimbursement out of estate
-STATUTE-
If the tax or any part thereof is paid by, or collected out of,
that part of the estate passing to or in the possession of any
person other than the executor in his capacity as such, such person
shall be entitled to reimbursement out of any part of the estate
still undistributed or by a just and equitable contribution by the
persons whose interest in the estate of the decedent would have
been reduced if the tax had been paid before the distribution of
the estate or whose interest is subject to equal or prior liability
for the payment of taxes, debts, or other charges against the
estate, it being the purpose and intent of this chapter that so far
as is practicable and unless otherwise directed by the will of the
decedent the tax shall be paid out of the estate before its
distribution.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 402.)
-End-
-CITE-
26 USC Sec. 2206 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter C - Miscellaneous
-HEAD-
Sec. 2206. Liability of life insurance beneficiaries
-STATUTE-
Unless the decedent directs otherwise in his will, if any part of
the gross estate on which tax has been paid consists of proceeds of
policies of insurance on the life of the decedent receivable by a
beneficiary other than the executor, the executor shall be entitled
to recover from such beneficiary such portion of the total tax paid
as the proceeds of such policies bear to the taxable estate. If
there is more than one such beneficiary, the executor shall be
entitled to recover from such beneficiaries in the same ratio. In
the case of such proceeds receivable by the surviving spouse of the
decedent for which a deduction is allowed under section 2056
(relating to marital deduction), this section shall not apply to
such proceeds except as to the amount thereof in excess of the
aggregate amount of the marital deductions allowed under such
section.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 402; Pub. L. 94-455, title XX,
Sec. 2001(c)(1)(H), Oct. 4, 1976, 90 Stat. 1852.)
-MISC1-
AMENDMENTS
1976 - Pub. L. 94-455 substituted "the taxable estate" for "the
sum of the taxable estate and the amount of the exemption allowed
in computing the taxable estate, determined under section 2051"
after "policies bear to".
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by Pub. L. 94-455 applicable to estates of decedents
dying after Dec. 31, 1976, see section 2001(d)(1) of Pub. L.
94-455, set out as a note under section 2001 of this title.
-End-
-CITE-
26 USC Sec. 2207 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter C - Miscellaneous
-HEAD-
Sec. 2207. Liability of recipient of property over which decedent
had power of appointment
-STATUTE-
Unless the decedent directs otherwise in his will, if any part of
the gross estate on which the tax has been paid consists of the
value of property included in the gross estate under section 2041,
the executor shall be entitled to recover from the person receiving
such property by reason of the exercise, nonexercise, or release of
a power of appointment such portion of the total tax paid as the
value of such property bears to the taxable estate. If there is
more than one such person, the executor shall be entitled to
recover from such persons in the same ratio. In the case of such
property received by the surviving spouse of the decedent for which
a deduction is allowed under section 2056 (relating to marital
deduction), this section shall not apply to such property except as
to the value thereof reduced by an amount equal to the excess of
the aggregate amount of the marital deductions allowed under
section 2056 over the amount of proceeds of insurance upon the life
of the decedent receivable by the surviving spouse for which
proceeds a marital deduction is allowed under such section.
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 402; Pub. L. 94-455, title XX,
Sec. 2001(c)(1)(I), Oct. 4, 1976, 90 Stat. 1852.)
-MISC1-
AMENDMENTS
1976 - Pub. L. 94-455 substituted "the taxable estate" for "the
sum of the taxable estate and the amount of the exemption allowed
in computing the taxable estate, determined under section 2052, or
section 2106(a), as the case may be" after "property bears to".
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by Pub. L. 94-455 applicable to estates of decedents
dying after Dec. 31, 1976, see section 2001(d)(1) of Pub. L.
94-455, set out as a note under section 2001 of this title.
-End-
-CITE-
26 USC Sec. 2207A 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter C - Miscellaneous
-HEAD-
Sec. 2207A. Right of recovery in the case of certain marital
deduction property
-STATUTE-
(a) Recovery with respect to estate tax
(1) In general
If any part of the gross estate consists of property the value
of which is includible in the gross estate by reason of section
2044 (relating to certain property for which marital deduction
was previously allowed), the decedent's estate shall be entitled
to recover from the person receiving the property the amount by
which -
(A) the total tax under this chapter which has been paid,
exceeds
(B) the total tax under this chapter which would have been
payable if the value of such property had not been included in
the gross estate.
(2) Decedent may otherwise direct
Paragraph (1) shall not apply with respect to any property to
the extent that the decedent in his will (or a revocable trust)
specifically indicates an intent to waive any right of recovery
under this subchapter with respect to such property.
(b) Recovery with respect to gift tax
If for any calendar year tax is paid under chapter 12 with
respect to any person by reason of property treated as transferred
by such person under section 2519, such person shall be entitled to
recover from the person receiving the property the amount by which
-
(1) the total tax for such year under chapter 12, exceeds
(2) the total tax which would have been payable under such
chapter for such year if the value of such property had not been
taken into account for purposes of chapter 12.
(c) More than one recipient of property
For purposes of this section, if there is more than one person
receiving the property, the right of recovery shall be against each
such person.
(d) Taxes and interest
In the case of penalties and interest attributable to additional
taxes described in subsections (a) and (b), rules similar to
subsections (a), (b), and (c) shall apply.
-SOURCE-
(Added Pub. L. 97-34, title IV, Sec. 403(d)(4)(A), Aug. 13, 1981,
95 Stat. 304; amended Pub. L. 105-34, title XIII, Sec. 1302(a),
Aug. 5, 1997, 111 Stat. 1039.)
-MISC1-
AMENDMENTS
1997 - Subsec. (a)(2). Pub. L. 105-34 amended heading and text of
par. (2) generally. Prior to amendment, text read as follows:
"Paragraph (1) shall not apply if the decedent otherwise directs by
will."
EFFECTIVE DATE OF 1997 AMENDMENT
Section 1302(c) of Pub. L. 105-34 provided that: "The amendments
made by this section [amending this section and section 2207B of
this title] shall apply with respect to the estates of decedents
dying after the date of the enactment of this Act [Aug. 5, 1997]."
EFFECTIVE DATE
Section applicable to estates of decedents dying after Dec. 31,
1981, see section 403(e) of Pub. L. 97-34, set out as an Effective
Date of 1981 Amendment note under section 2056 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in section 2519 of this title.
-End-
-CITE-
26 USC Sec. 2207B 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter C - Miscellaneous
-HEAD-
Sec. 2207B. Right of recovery where decedent retained interest
-STATUTE-
(a) Estate tax
(1) In general
If any part of the gross estate on which tax has been paid
consists of the value of property included in the gross estate by
reason of section 2036 (relating to transfers with retained life
estate), the decedent's estate shall be entitled to recover from
the person receiving the property the amount which bears the same
ratio to the total tax under this chapter which has been paid as
-
(A) the value of such property, bears to
(B) the taxable estate.
(2) Decedent may otherwise direct
Paragraph (1) shall not apply with respect to any property to
the extent that the decedent in his will (or a revocable trust)
specifically indicates an intent to waive any right of recovery
under this subchapter with respect to such property.
(b) More than one recipient
For purposes of this section, if there is more than 1 person
receiving the property, the right of recovery shall be against each
such person.
(c) Penalties and interest
In the case of penalties and interest attributable to the
additional taxes described in subsection (a), rules similar to the
rules of subsections (a) and (b) shall apply.
(d) No right of recovery against charitable remainder trusts
No person shall be entitled to recover any amount by reason of
this section from a trust to which section 664 applies (determined
without regard to this section).
-SOURCE-
(Added Pub. L. 100-647, title III, Sec. 3031(f)(1), Nov. 10, 1988,
102 Stat. 3637; amended Pub. L. 101-508, title XI, Sec.
11601(b)(1), Nov. 5, 1990, 104 Stat. 1388-490; Pub. L. 105-34,
title XIII, Sec. 1302(b), Aug. 5, 1997, 111 Stat. 1039.)
-MISC1-
AMENDMENTS
1997 - Subsec. (a)(2). Pub. L. 105-34 amended heading and text of
par. (2) generally. Prior to amendment, text read as follows:
"Paragraph (1) shall not apply if the decedent otherwise directs in
a provision of his will (or a revocable trust) specifically
referring to this section."
1990 - Subsec. (b). Pub. L. 101-508, Sec. 11601(b)(1)(A),
redesignated former subsec. (c) as (b) and struck out former
subsec. (b) which read as follows: "If for any calendar year tax is
paid under chapter 12 with respect to any person by reason of
property treated as transferred by such person under section
2036(c)(4), such person shall be entitled to recover from the
original transferee (as defined in section 2036(c)(4)(C)(ii)) the
amount which bears the same ratio to the total tax for such year
under chapter 12 as -
"(1) the value of such property for purposes of chapter 12,
bears to
"(2) the total amount of the taxable gifts for such year."
Subsec. (c). Pub. L. 101-508, Sec. 11601(b)(1), redesignated
subsec. (d) as (c) and substituted "subsection (a)" for
"subsections (a) and (b)" and "subsections (a) and (b)" for
"subsections (a), (b), and (c)". Former subsec. (c) redesignated
(b).
Subsecs. (d), (e). Pub. L. 101-508, Sec. 11601(b)(1)(A),
redesignated subsecs. (d) and (e) as (c) and (d), respectively.
Former subsec. (d) redesignated (c).
EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by Pub. L. 105-34 applicable with respect to estates of
decedents dying after Aug. 5, 1997, see section 1302(c) of Pub. L.
105-34, set out as a note under section 2207A of this title.
EFFECTIVE DATE OF 1990 AMENDMENT
Amendment by Pub. L. 101-508 applicable in the case of property
transferred after Dec. 17, 1987, see section 11601(c) of Pub. L.
101-508, set out as a note under section 2036 of this title.
EFFECTIVE DATE
Section effective as if included in provisions of Revenue Act of
1987, Pub. L. 100-203, title X, except that if an amount is
included in the gross estate of a decedent under section 2036 of
this title other than solely by reason of section 2036(c) of this
title, section applicable to such amount only with respect to
property transferred after Nov. 10, 1988, see section 3031(h)(1),
(3) of Pub. L. 100-647, set out as an Effective Date of 1988
Amendment note under section 2036 of this title.
-End-
-CITE-
26 USC Sec. 2208 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter C - Miscellaneous
-HEAD-
Sec. 2208. Certain residents of possessions considered citizens of
the United States
-STATUTE-
A decedent who was a citizen of the United States and a resident
of a possession thereof at the time of his death shall, for
purposes of the tax imposed by this chapter, be considered a
"citizen" of the United States within the meaning of that term
wherever used in this title unless he acquired his United States
citizenship solely by reason of (1) his being a citizen of such
possession of the United States, or (2) his birth or residence
within such possession of the United States.
-SOURCE-
(Added Pub. L. 85-866, title I, Sec. 102(a), Sept. 2, 1958, 72
Stat. 1674.)
-MISC1-
EFFECTIVE DATE
Section applicable to estates of decedents dying after Sept. 2,
1958, see section 102(d) of Pub. L. 85-866, set out as an Effective
Date of 1958 Amendment note under section 2011 of this title.
-End-
-CITE-
26 USC Sec. 2209 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter C - Miscellaneous
-HEAD-
Sec. 2209. Certain residents of possessions considered nonresidents
not citizens of the United States
-STATUTE-
A decedent who was a citizen of the United States and a resident
of a possession thereof at the time of his death shall, for
purposes of the tax imposed by this chapter, be considered a
"nonresident not a citizen of the United States" within the meaning
of that term wherever used in this title, but only if such person
acquired his United States citizenship solely by reason of (1) his
being a citizen of such possession of the United States, or (2) his
birth or residence within such possession of the United States.
-SOURCE-
(Added Pub. L. 86-779, Sec. 4(b)(1), Sept. 14, 1960, 74 Stat. 999.)
-MISC1-
EFFECTIVE DATE
Section applicable with respect to estates of decedents dying
after Sept. 14, 1960, see section 4(e)(2) of Pub. L. 86-779, set
out as an Effective Date of 1960 Amendment note under section 2106
of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in section 2102 of this title.
-End-
-CITE-
26 USC Sec. 2210 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 11 - ESTATE TAX
Subchapter C - Miscellaneous
-HEAD-
Sec. 2210. Termination
-STATUTE-
(a) In general
Except as provided in subsection (b), this chapter shall not
apply to the estates of decedents dying after December 31, 2009.
(b) Certain distributions from qualified domestic trusts
In applying section 2056A with respect to the surviving spouse of
a decedent dying before January 1, 2010 -
(1) section 2056A(b)(1)(A) shall not apply to distributions
made after December 31, 2020, and
(2) section 2056A(b)(1)(B) shall not apply after December 31,
2009.
-SOURCE-
(Added Pub. L. 107-16, title V, Sec. 501(a), June 7, 2001, 115
Stat. 69.)
-STATAMEND-
TERMINATION OF SECTION
For termination of section by section 901 of Pub. L. 107-16, see
Effective and Termination Dates note below.
-MISC1-
PRIOR PROVISIONS
A prior section 2210, added Pub. L. 98-369, div. A, title V, Sec.
544(a), July 18, 1984, 98 Stat. 892; amended Pub. L. 99-514, title
XVIII, Secs. 1854(d)(1)(A), (2)-(6), 1899A(37), Oct. 22, 1986, 100
Stat. 2879, 2880, 2960, related to liability for payment in case of
transfer of employer securities to an employee stock ownership plan
or a worker-owned cooperative, prior to repeal by Pub. L. 101-239,
title VII, Sec. 7304(b)(1), (3), Dec. 19, 1989, 103 Stat. 2353,
applicable to estates of decedents dying after July 12, 1989.
EFFECTIVE AND TERMINATION DATES
Pub. L. 107-16, title V, Sec. 501(d), June 7, 2001, 115 Stat. 69,
provided that: "The amendments made by this section [enacting this
section and section 2664 of this title] shall apply to the estates
of decedents dying, and generation-skipping transfers, after
December 31, 2009."
Section inapplicable to estates of decedents dying, gifts made,
or generation skipping transfers, after Dec. 31, 2010, and the
Internal Revenue Code of 1986 to be applied and administered to
such estates, gifts, and transfers as if it had never been enacted,
see section 901 of Pub. L. 107-16, set out as an Effective and
Termination Dates of 2001 Amendment note under section 1 of this
title.
-End-
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