Internal Revenue Code:Sec. 2038. Revocable transfers

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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. 2038. Revocable transfers
 
    (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.
 

Sources

    (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.)
 

Miscellaneous

                                 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).''
 

References

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