26 U.S.C. § 2035: Adjustments for certain gifts made within 3 years of decedent’s death

Amended 1976, 1997

1997 Pub. L. 105-34 Pub. L. 105–34 amended section catchline and text generally. Prior to amendment, section consisted of subsecs. (a) to (d) relating to adjustments for gifts made within 3 years of decedent’s death.
1976 Pub. L. 94-455 Pub. L. 94–455 substituted provisions covering adjustments for gifts made within 3 years of decedent’s death for provisions under which transfers by the decedent within 3 years of the decedent’s death were deemed to have been made in contemplation of death and included in the value of the gross estate.

Cases: United States v. Hemme, 476 U.S. 558 (1986); Bel v. United States, 452 F.2d 683 (5th Cir. 1971); Estate of Hutchinson v. Commissioner, 765 F.2d 665 (7th Cir. 1985)

Final rules 2

(a) Inclusion of certain property in gross estate If—

Textual readingALL OF= property included in gross estate

(1) the decedent made a transfer (by trust or otherwise) of an interest in any property, or relinquished a power with respect to any property, during the 3-year period ending on the date of the decedent’s death, and

(2) the value of such property (or an interest therein) would have been included in the decedent’s gross estate under section 2036, 2037, 2038, or 2042 if such transferred interest or relinquished power had been retained by the decedent on the date of his death,

the value of the gross estate shall include the value of any property (or interest therein) which would have been so included.

Amended 1962

1962 Pub. L. 87-834 Pub. L. 87–834 struck out provisions which excepted real property situated outside of the United States.

Cited by 2

(b) Inclusion of gift tax on gifts made during 3 years before decedent’s death The amount of the gross estate (determined without regard to this subsection) shall be increased by the amount of any tax paid under chapter 12 by the decedent or his estate on any gift made by the decedent or his spouse during the 3-year period ending on the date of the decedent’s death.

Amended 1978, 1981, 1983

1983 Pub. L. 97-448 Pub. L. 97–448, § 104(a)(9), substituted “section 6019(2)” for “section 6019(a)(2)”.
1981 Pub. L. 97-34 Pub. L. 97–34, § 403(b)(3)(B), inserted “(other than by reason of section 6019(a)(2))” after “section 6019”.
1978 Pub. L. 95-600 Pub. L. 95–600 substituted in par. (2) provisions relating to gifts for which donee was not required by section 6019 to file gift tax returns for provisions relating to gifts excludable in computing taxable gifts by reason of section 2503(b) and inserted provisions following par. (2) relating to inapplicability of par. (2) to transfers respecting life insurance policies.

Cited by 1

(1) In general For purposes of—

Cited by 2

(A) section 303(b) (relating to distributions in redemption of stock to pay death taxes),

(B) section 2032A (relating to special valuation of certain farms, etc., real property), and

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 made a transfer, by trust or otherwise, during the 3-year period ending on the date of the decedent’s death.

(2) Coordination with section 6166 An estate shall be treated as meeting the 35 percent of adjusted gross estate requirement of section 6166(a)(1) only if the estate meets such requirement both with and without the application of subsection (a).

Amended 2000

2000 Pub. L. 106-554 Pub. L. 106–554, § 1(a)(7) [title III, § 319(14)(A)], substituted “subsection (a)” for “paragraph (1)”.

Cited by 1

(3) Marital and small transfers Paragraph (1) shall not apply to any transfer (other than a transfer with respect to a life insurance policy) made during a calendar year to any donee if the decedent was not required by section 6019 (other than by reason of section 6019(2)) to file any gift tax return for such year with respect to transfers to such donee.

Textual readingALL OF= paragraph (1) does not apply

“any transfer (other than a transfer with respect to a life insurance policy) made during a calendar year to any donee”

“the decedent was not required by section 6019 (other than by reason of section 6019(2)) to file any gift tax return for such year with respect to transfers to such donee”

(d) Exception Subsection (a) and paragraph (1) of subsection (c) shall not apply to any bona fide sale for an adequate and full consideration in money or money’s worth.

Amended 1981, 1983, 2000

2000 Pub. L. 106-554 Pub. L. 106–554, § 1(a)(7) [title III, § 319(14)(B)], inserted “and paragraph (1) of subsection (c)” after “Subsection (a)”.
1983 Pub. L. 97-448 Pub. L. 97–448, § 104(d)(2), inserted “of this subsection and paragraph (2) of subsection (b)” after “Paragraph (1)”, and struck out “2041,” after “2038,”.
1983 Pub. L. 97-448 Pub. L. 97–448, § 104(d)(1)(C), redesignated subpar. (D) as (C). Former subpar. (C), which referred to section 6166 (relating to extension of time for payment of estate tax where estate consists largely of interest in closely held business), was struck out.
1983 Pub. L. 97-448 Pub. L. 97–448, § 104(d)(1)(A), added par. (4).
1981 Pub. L. 97-34 Pub. L. 97–34, § 424(a), added subsec. (d).

Cited by 1

(e) Treatment of certain transfers from revocable trusts For purposes of this section and section 2038, any transfer from any portion of a trust during any period that such portion was treated under section 676 as owned by the decedent by reason of a power in the grantor (determined without regard to section 672(e)) shall be treated as a transfer made directly by the decedent.