Internal Revenue Code:Sec. 2501. Imposition of tax
From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.
From TaxAlmanac
Contents |
Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle B - Estate and Gift Taxes
CHAPTER 12 - GIFT TAX
Subchapter A - Determination of Tax Liability
Statute
Sec. 2501. Imposition of tax
(a) Taxable transfers
(1) General rule
A tax, computed as provided in section 2502, is hereby imposed
for each calendar year on the transfer of property by gift during
such calendar year by any individual resident or nonresident.
(2) Transfers of intangible property
Except as provided in paragraph (3), paragraph (1) shall not
apply to the transfer of intangible property by a nonresident not
a citizen of the United States.
(3) Exception.--
(A) Certain individuals.--Paragraph (2) shall not
apply in the case of a donor to whom section 877(b)
applies for the taxable year which includes the date of
the transfer.
(B) Credit for foreign gift taxes.--The tax
imposed by this section solely by reason of this
paragraph shall be credited with the amount of any gift
tax actually
paid to any foreign country in respect of any gift which
is taxable under this section solely by reason of this
paragraph.
(4) Transfers to political organizations
Paragraph (1) shall not apply to the transfer of money or other
property to a political organization (within the meaning of
section 527(e)(1)) for the use of such organization.
(5) Transfers of certain stock.--
(A) In general.--In the case of a transfer of stock
in a foreign corporation described in subparagraph (B)
by a donor to whom section 877(b) applies for the
taxable year which includes the date of the transfer--
(i) section 2511(a) <<NOTE: Applicability.>> shall be
applied without regard to whether such stock is
situated within the United States, and
(ii) the value of such stock for purposes of
this chapter shall be its U.S.-asset value
determined under subparagraph (C).
(B) Foreign corporation described.--A foreign
corporation is described in this subparagraph with
respect to a donor if--
(i) the donor owned (within the meaning of
section 958(a)) at the time of such transfer 10
percent or more of the total combined voting power
of all classes of stock entitled to vote of the
foreign corporation, and
(ii) such donor owned (within the meaning of
section 958(a)), or is considered to have owned
(by applying the ownership rules of section 958(b)),
at the time of such transfer, more than 50 percent of--
(I) the total combined voting
power of all classes of stock entitled
to vote of such corporation, or
(II) the total value of the stock
of such corporation.
(C) U.S.-asset value.--For purposes of
subparagraph (A), the U.S.-asset value of stock shall be
the amount which bears the same ratio to the fair market
value of such stock at the time of transfer as--
(i) the fair market value (at such time) of
the assets owned by such foreign corporation and
situated in the United States, bears to
(ii) the total fair market value (at such
time) of all assets owned by such foreign coporation.
(b) Certain residents of possessions considered citizens of the
United States
A donor who is a citizen of the United States and a resident of a
possession thereof shall, for purposes of the tax imposed by this
chapter, be considered a ''citizen'' of the United States within
the meaning of that term wherever used in this title unless he
acquired his United States citizenship solely by reason of (1) his
being a citizen of such possession of the United States, or (2) his
birth or residence within such possession of the United States.
(c) Certain residents of possessions considered nonresidents not
citizens of the United States
A donor who is a citizen of the United States and a resident of a
possession thereof shall, for purposes of the tax imposed by this
chapter, be considered a ''nonresident not a citizen of the United
States'' within the meaning of that term wherever used in this
title, but only if such donor acquired his United States
citizenship solely by reason of (1) his being a citizen of such
possession of the United States, or (2) his birth or residence
within such possession of the United States.
(d) Cross references
(1) For increase in basis of property acquired by gift for
gift tax paid, see section 1015(d).
(2) For exclusion of transfers of property outside the United
States by a nonresident who is not a citizen of the United
States, see section 2511(a).
Sources
(Aug. 16, 1954, ch. 736, 68A Stat. 403; Pub. L. 85-866, title I,
Sec. 43(b), 102(b), Sept. 2, 1958, 72 Stat. 1641, 1674; Pub. L.
86-779, Sec. 4(d), Sept. 14, 1960, 74 Stat. 1000; Pub. L. 89-809,
title I, Sec. 109(a), Nov. 13, 1966, 80 Stat. 1574; Pub. L. 91-614,
title I, Sec. 102(a)(1), Dec. 31, 1970, 84 Stat. 1838; Pub. L.
93-625, Sec. 14(a), Jan. 3, 1975, 88 Stat. 2121; Pub. L. 94-455,
title XIX, Sec. 1902(a)(10), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat.
1805, 1834; Pub. L. 97-34, title IV, Sec. 442(a)(1), Aug. 13, 1981,
95 Stat. 320; Pub. L. 100-647, title III, Sec. 3031(a)(2), Nov. 10,
1988, 102 Stat. 3635; Pub. L. 101-508, title XI, Sec. 11601(b)(2),
Nov. 5, 1990, 104 Stat. 1388-490; Pub. L. 104-191, title V, Sec.
511(e)(2), (f)(2)(B), Aug. 21, 1996, 110 Stat. 2098, 2100; Pub. L.
105-34, title XVI, Sec. 1602(g)(5), Aug. 5, 1997, 111 Stat. 1095.)
Miscellaneous
AMENDMENTS
2004 - Pub. L. 108-357, Sec. 804(d). Subsection (a) of
section 2501 (relating to taxable transfers) is amended by
striking paragraph (4), by redesignating paragraph (5) as
paragraph (4), and by striking paragraph (3) and inserting the
following new paragraphs: "(3) Exception." and "(5) Transfers of
certain stock".
1997 - Subsec. (a)(3)(C). Pub. L. 105-34 substituted ''donor''
for ''decedent''.
1996 - Subsec. (a)(3). Pub. L. 104-191, Sec. 511(e)(2),
substituted ''Exception'' for ''Exceptions'' in heading and amended
text generally. Prior to amendment, text read as follows:
''Paragraph (2) shall not apply in the case of a donor who at any
time after March 8, 1965, and within the 10-year period ending with
the date of transfer lost United States citizenship unless -
''(A) such donor's loss of United States citizenship resulted
from the application of section 301(b), 350, or 355 of the
Immigration and Nationality Act, as amended (8 U.S.C. 1401(b),
1482, or 1487), or
''(B) such loss did not have for one of its principal purposes
the avoidance of taxes under this subtitle or subtitle A.''
Subsec. (a)(3)(E). Pub. L. 104-191, Sec. 511(f)(2)(B), added
subpar. (E).
1990 - Subsec. (d)(3). Pub. L. 101-508 struck out par. (3) which
read as follows: ''For treatment of certain transfers related to
estate tax valuation freezes as gifts to which this chapter
applies, see section 2036(c)(4).''
1988 - Subsec. (d)(3). Pub. L. 100-647 added par. (3).
1981 - Subsec. (a)(1), (4). Pub. L. 97-34 substituted ''calendar
year'' for ''calendar quarter'' wherever appearing.
1976 - Subsec. (a)(1). Pub. L. 94-455 inserted ''for each
calendar quarter'' after ''hereby imposed'' and struck out ''For
the first calendar quarter of calendar year 1971 and each calendar
quarter thereafter'' after ''General rule-''.
Subsec. (a)(4). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out
''or his delegate'' after ''Secretary''.
1975 - Subsec. (a)(5). Pub. L. 93-625 added par. (5).
1970 - Subsec. (a)(1). Pub. L. 91-614, Sec. 102(a)(1)(A),
substituted ''For the first calendar quarter of the calendar year
1971 and each calendar quarter thereafter'' for ''For the calendar
year 1955 and each calendar year thereafter'' and ''during such
calendar quarter'' for ''during such calendar year''.
Subsec. (a)(4). Pub. L. 91-614, Sec. 102(a)(1)(B), substituted
''calendar quarter'' for ''calendar year''.
1966 - Subsec. (a). Pub. L. 89-809 redesignated existing
provisions as par. (1), struck out '', except transfers of
intangible property by a nonresident not a citizen of the United
States and who was not engaged in business in the United States
during such calendar year'' after ''resident or nonresident'', and
added pars. (2) to (4).
1960 - Subsec. (a). Pub. L. 86-779, Sec. 4(d)(2), struck out
''who is'' before ''not a citizen''.
Subsecs. (c), (d). Pub. L. 86-779, Sec. 4(d)(1), added subsec.
(c) and redesignated former subsec. (c) as (d).
1958 - Subsec. (b). Pub. L. 85-866, Sec. 102(b), added subsec.
(b) and redesignated former subsec. (b) as (c).
Subsec. (c). Pub. L. 85-866, Sec. 102(b), redesignated former
subsec. (b) as (c) and Pub. L. 85-866, Sec. 43(b), made the heading
read in the plural, designated existing provisions as par. (2) and
added par. (1).
EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by Pub. L. 105-34 effective as if included in the
provisions of the Health Insurance Portability and Accountability
Act of 1996, Pub. L. 104-191, to which such amendment relates, see
section 1602(i) of Pub. L. 105-34, set out as a note under section
26 of this title.
EFFECTIVE DATE OF 1996 AMENDMENT
Amendment by Pub. L. 104-191 applicable to individuals losing
United States citizenship on or after Feb. 6, 1995, and to
long-term residents of the United States with respect to whom an
event described in section 877(e)(1)(A) or (B) of this title occurs
on or after Feb. 6, 1995, with special rule for certain individuals
who performed an act of expatriation specified in section
1481(a)(1)-(4) of Title 8, Aliens and Nationality, before Feb. 6,
1995, see section 511(g) of Pub. L. 104-191, set out as a note
under section 877 of this title.
EFFECTIVE DATE OF 1990 AMENDMENT
Amendment by Pub. L. 101-508 applicable in the case of property
transferred after Dec. 17, 1987, see section 11601(c) of Pub. L.
101-508, set out as a note under section 2036 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 applicable in cases where transfer
referred to in section 2036(c)(1)(B) of this title is on or after
June 21, 1988, see section 3031(h)(2) of Pub. L. 100-647, set out
as a note under section 2036 of this title.
EFFECTIVE DATE OF 1981 AMENDMENT
Section 442(e) of Pub. L. 97-34 provided that: ''The amendments
made by this section (amending this section and sections 1015,
2502, 2503, 2504, 2505, 2512, 2513, 2522, 6019, 6075, and 6212 of
this title) shall apply with respect to gifts made after December
31, 1981.''
EFFECTIVE DATE OF 1976 AMENDMENT
Section 1902(c)(2) of Pub. L. 94-455, as amended by Pub. L.
95-600, title VII, Sec. 703(j)(12), Nov. 6, 1978, 92 Stat. 2942,
provided that: ''The amendments made by paragraphs (10), (11), and
(12)(D) and (E) of subsection (a) (amending this section and
sections 2522 and 2523 of this title) shall apply with respect to
gifts made after December 31, 1976.''
EFFECTIVE DATE OF 1975 AMENDMENT
Section 14(b) of Pub. L. 93-625 provided that: ''The amendment
made by subsection (a) (amending this section) shall apply to
transfers made after May 7, 1974.''
EFFECTIVE DATE OF 1970 AMENDMENT
Section 102(e) of Pub. L. 91-614 provided that: ''The amendments
made by this section (amending this section and sections 1015,
2012, 2502, 2503, 2504, 2512, 2513, 2515, 2521, 2522, 2523, 6019,
6075, 6212, 6214, 6324, 6501, and 6512 of this title and enacting
provisions set out as a note under this section) shall apply with
respect to gifts made after December 31, 1970.''
EFFECTIVE DATE OF 1966 AMENDMENT
Section 109(c) of Pub. L. 89-809 provided that: ''The amendments
made by this section (amending this section and section 2511 of
this title) shall apply with respect to the calendar year 1967 and
all calendar years thereafter.''
EFFECTIVE DATE OF 1960 AMENDMENT
Section 4(e)(3) of Pub. L. 86-779 provided that: ''The amendments
made by subsection (d) (amending this section) shall apply with
respect to gifts made after the date of the enactment of this Act
(Sept. 14, 1960).''
EFFECTIVE DATE OF 1958 AMENDMENT
Amendment by Pub. L. 85-866 applicable to gifts made after
September 2, 1958, see section 102(d) of Pub. L. 85-866, set out as
a note under section 2011 of this title.
ELECTION TO HAVE AMENDMENTS BY TITLE IV OF THE ECONOMIC RECOVERY
TAX ACT OF 1981 NOT APPLY
Pub. L. 97-448, title I, Sec. 104(d)(3), Jan. 12, 1983, 96 Stat.
2383, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100
Stat. 2095, provided that:
''(A) In the case of any decedent -
''(i) who dies before August 13, 1984, and
''(ii) who made a gift (before August 13, 1981, and during the
3-year period ending on the date of the decedent's death) on
which tax imposed by chapter 12 of the Internal Revenue Code of
1986 (formerly I.R.C. 1954) has been paid before April 16, 1982,
such decedent's executor may make an election to have subtitle B of
such Code (relating to estate and gift taxes) applied with respect
to such decedent without regard to any of the amendments made by
title IV of the Economic Recovery Tax Act of 1981 (Pub. L. 97-34,
title IV).
''(B) An election under subparagraph (A) shall be made at such
time and in such manner as the Secretary of the Treasury or his
delegate shall prescribe.
''(C) An election under subparagraph (A), once made, shall be
irrevocable.''
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 305, 351, 877, 2056A,
2502, 2505, 2511, 2523, 2661 of this title.
