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.
1976—Subsec. (b). Pub. L. 94–455struck out “or his delegate” after “Secretary”.
1962—Subsec. (a). Pub. L. 87–834struck out provisions which excepted real property situated outside of the United States.
Effective Date of 1962 Amendment
Amendment by Pub. L. 87–834applicable to estates of decedents dying after Oct. 16, 1962, except as otherwise provided, see section 18(b) ofPub. L. 87–834, set out as a note under section
2031 of this title.
The table below lists the classification updates, since Jan. 3, 2012, for this section. Updates to a broader range of sections may be found at the update page for containing chapter, title, etc.
The most recent Classification Table update that we have noticed was Tuesday, August 13, 2013
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Description of Change
Statutes at Large
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