Internal Revenue Code:Sec. 2040. Joint interests

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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. 2040. Joint interests
 
    (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.
 

Sources

    (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.)
 

Miscellaneous

                                 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.''
 

References

                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 1023, 2045, 2056, 6324 of
    this title.