Internal Revenue Code:Sec. 2037. Transfers taking effect at death

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Location in Internal Revenue Code

     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
       

Statute

    Sec. 2037. Transfers taking effect at death
 
    (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.
 

Sources

    (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.)
 

Miscellaneous

                                 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.
 

References

                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2035, 2041, 2043, 2045,
    2104, 2107, 6324 of this title.