26 U.S. Code § 303 - Distributions in redemption of stock to pay death taxes
For purposes of subparagraph (A), stock of 2 or more corporations, with respect to each of which there is included in determining the value of the decedent’s gross estate 20 percent or more in value of the outstanding stock, shall be treated as the stock of a single corporation. For purposes of the 20-percent requirement of the preceding sentence, stock which, at the decedent’s death, represents the surviving spouse’s interest in property held by the decedent and the surviving spouse as community property or as joint tenants, tenants by the entirety, or tenants in common shall be treated as having been included in determining the value of the decedent’s gross estate.
Subsection (a) shall apply to a distribution by a corporation only to the extent that the interest of the shareholder is reduced directly (or through a binding obligation to contribute) by any payment of an amount described in paragraph (1) or (2) of subsection (a).
1986—Subsec. (d). Pub. L. 99–514 amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows: “Under regulations prescribed by the Secretary, where stock in a corporation is subject to tax under section 2601 as a result of a generation-skipping transfer (within the meaning of section 2611(a)), which occurs at or after the death of the deemed transferor (within the meaning of section 2612)—
“(1) the stock shall be deemed to be included in the gross estate of the deemed transferor;
“(2) taxes of the kind referred to in subsection (a)(1) which are imposed because of the generation-skipping transfer shall be treated as imposed because of the deemed transferor’s death (and for this purpose the tax imposed by section 2601 shall be treated as an estate tax);
“(3) the period of distribution shall be measured from the date of the generation-skipping transfer; and
“(4) the relationship of stock to the decedent’s estate shall be measured with reference solely to the amount of the generation-skipping transfer.”
1981—Subsec. (b)(1)(C). Pub. L. 97–34, § 422(e)(1), struck out “or 6166A” after “section 6166” in two places.
Subsec. (b)(2)(A). Pub. L. 97–34, § 422(b)(1), substituted “35” for “50” before percent.
Subsec. (b)(2)(B). Pub. L. 97–34, § 422(b)(2), in heading, substituted “stock in 2” for “stock of two”, in first sentence, struck out “the 50 percent requirement” before “of subparagraph (A)” and substituted “2” for “two” and “20 percent or more in value” for “more than 75 percent in value”, and, in last sentence, substituted “For purposes of the 20-percent requirement” for “For the purpose of the 75 percent requirement” and, in determining value of decedent’s gross estate, treated the estate as including stock which at decedent’s death represented surviving spouse’s interest in property held by the decedent and surviving spouse either as joint tenants, tenants by the entirety, or tenants in common.
1976—Subsec. (b)(1)(C). Pub. L. 94–455, § 2004(e)(1), added subpar. (C).
Subsec. (b)(2)(A). Pub. L. 94–455, § 2004(e)(2)(A), substituted provisions limiting the applicability of subsec. (a) to corporate distributions in which the value of the corporate stock included in decedent’s gross estate exceeds 50 percent of the gross estate over deductions allowed under sections 2053 and 2054 for provisions limiting the applicability of subsec. (a) to corporate distributions in which the value of the corporate stock included in decedent’s gross estate is either more than 35 percent of the gross estate or 50 percent of the taxable estate.
Subsec. (b)(2)(B). Pub. L. 94–455, § 2004(e)(2)(B), substituted “the 50 percent requirement” for “the 35 percent and 50 percent requirements”.
Subsec. (b)(3), (4). Pub. L. 94–455, § 2004(e)(3), added pars. (3) and (4).
Subsec. (c). Pub. L. 94–455, § 2004(e)(4), substituted “limitation specified in subsection (b)” for “limitation specified in subsection (b)(1)”.
Subsec. (d). Pub. L. 94–455, § 2006(b)(4), added subsec. (d).
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.
Amendment by section 2004(e)(1)–(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 an Effective Date note under section 6166 of this title.
Written determinations for this section
These documents, sometimes referred to as "Private Letter Rulings", are taken from the IRS Written Determinations page; the IRS also publishes a fuller explanation of what they are and what they mean. The collection is updated (at our end) daily. It appears that the IRS updates their listing every Friday.
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- Inadvertent Terminations : 2008-07-25
- Passive Investment Income : 2008-07-25
- Stock Redemption Within Required Period : 2008-07-25
- Extension of Time For Payment of Estate Where Estate Consists Largely of Interest in Closely Held Business : 2001-10-12
- Extension of Time to Pay Estate Tax : 2001-10-12
- Acceleration of Payments : 2001-10-12
- Acceleration of Estate Tax Payable in Installments : 2001-10-12
- Stock Redemption Within Required Period : 2001-10-12
- Series of Redemptions : 2001-10-12
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