Internal Revenue Code:Sec. 2042. Proceeds of life insurance

From TaxAlmanac

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. 2042. Proceeds of life insurance
 
      The value of the gross estate shall include the value of all
    property -
      (1) Receivable by the executor
        To the extent of the amount receivable by the executor as
      insurance under policies on the life of the decedent.
      (2) Receivable by other beneficiaries
        To the extent of the amount receivable by all other
      beneficiaries as insurance under policies on the life of the
      decedent with respect to which the decedent possessed at his
      death any of the incidents of ownership, exercisable either alone
      or in conjunction with any other person.  For purposes of the
      preceding sentence, the term ''incident of ownership'' includes a
      reversionary interest (whether arising by the express terms of
      the policy or other instrument or by operation of law) only if
      the value of such reversionary interest exceeded 5 percent of the
      value of the policy immediately before the death of the
      decedent.  As used in this paragraph, the term ''reversionary
      interest'' includes a possibility that the policy, or the
      proceeds of the policy, may return to the decedent or his estate,
      or may be subject to a power of disposition by him.  The value of
      a reversionary interest at any time 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, pursuant to regulations prescribed by the Secretary.
      In determining the value of a possibility that the policy or
      proceeds thereof may be subject to a power of disposition by the
      decedent, such possibility shall be valued as if it were a
      possibility that such policy or proceeds may return to the
      decedent or his estate.
 

Sources

    (Aug. 16, 1954, ch. 736, 68A Stat. 387; Pub. L. 94-455, title XIX,
    Sec. 1906(b)(13) (A), Oct. 4, 1976, 90 Stat. 1834.)
 

Miscellaneous

                                 AMENDMENTS
      1976 - Pub. L. 94-455 struck out ''or his delegate'' after
    ''Secretary''.
 

References

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