# 26 U.S.C. § 2036: Transfers with retained life estate

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s2036>. Cite pinpoints as 26 U.S.C. § 2036(a)(1).

## § 2036(a) General rule

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 (except in case of a bona fide sale for an adequate and full consideration in money or money’s worth), by trust or otherwise, under which he has retained for his life or for any period not ascertainable without reference to his death or for any period which does not in fact end before his death—

**§ 2036(a)(1)** the possession or enjoyment of, or the right to the income from, the property, or

**§ 2036(a)(2)** the right, either alone or in conjunction with any person, to designate the persons who shall possess or enjoy the property or the income therefrom.

## § 2036(b) Voting rights

**§ 2036(b)(1) In general.** For purposes of subsection (a)(1), the retention of the right to vote (directly or indirectly) shares of stock of a controlled corporation shall be considered to be a retention of the enjoyment of transferred property.

**§ 2036(b)(2) Controlled corporation.** For purposes of paragraph (1), a corporation shall be treated as a controlled corporation if, at any time after the transfer of the property and during the 3-year period ending on the date of the decedent’s death, the decedent owned (with the application of section 318), or had the right (either alone or in conjunction with any person) to vote, stock possessing at least 20 percent of the total combined voting power of all classes of stock.

**§ 2036(b)(3) Coordination with section 2035.** For purposes of applying section 2035 with respect to paragraph (1), the relinquishment or cessation of voting rights shall be treated as a transfer of property made by the decedent.

## § 2036(c) Limitation on application of general rule

This section shall not apply to a transfer made before March 4, 1931; nor to a transfer made after March 3, 1931, and before June 7, 1932, unless the property transferred would have been includible in the decedent’s gross estate by reason of the amendatory language of the joint resolution of March 3, 1931 (46 Stat. 1516).

## Regulations

- [Treas. Reg. § 20.2036-1](/26/reg/20.2036-1.md): Transfers with retained life estate. (interprets § 2036)

## Final rules

- [88 FR 37424](https://www.federalregister.gov/documents/2023/06/07/2023-11837/use-of-actuarial-tables-in-valuing-annuities-interests-for-life-or-a-term-of-years-and-remainder-or) (2023): Use of Actuarial Tables in Valuing Annuities, Interests for Life or a Term of Years, and Remainder or Reversionary Interests
- [76 FR 69126](https://www.federalregister.gov/documents/2011/11/08/2011-28824/graduated-retained-interests) (2011): Graduated Retained Interests
- [73 FR 40173](https://www.federalregister.gov/documents/2008/07/14/E8-15941/grantor-retained-interest-trusts-application-of-sections-2036-and-2039) (2008): Grantor Retained Interest Trusts-Application of Sections 2036 and 2039

## Leading cases

- [United States v. Byrum, 408 U.S. 125 (1972)](https://www.courtlistener.com/opinion/108599/united-states-v-byrum/)
- [Estate of Maxwell v. Commissioner, 3 F.3d 591 (1st Cir. 1993)](https://www.courtlistener.com/opinion/628971/estate-of-lydia-g-maxwell-deceased-first-national-bank-of-long-island/)
- [Estate of Thompson v. Commissioner, 382 F.3d 367 (3rd Cir. 2004)](https://www.courtlistener.com/opinion/787602/estate-of-theodore-thompson-deceased-betsy-t-turner-v-commissioner-of/)

## Connections

Cites: § 318 Constructive ownership of stock; § 2035 Adjustments for certain gifts made within 3 years of decedent’s death

Cited by: § 2035 Adjustments for certain gifts made within 3 years of decedent’s death; § 2207B Right of recovery where decedent retained interest

Derived from: 1939 § 811(c)

## Amendments

- 1954-08-16: [Act Aug. 16, 1954, ch. 736](/26/act/1954-ch736.md), 68A Stat. 382
- 1962-10-16: [Pub. L. 87-834](/26/act/87-834.md), 76 Stat. 1052
- 1976-10-04: [Pub. L. 94-455](/26/act/94-455.md), 90 Stat. 1893
- 1978-11-06: [Pub. L. 95-600](/26/act/95-600.md), 92 Stat. 2931
- 1987-12-22: [Pub. L. 100-203](/26/act/100-203.md), 101 Stat. 1330
- 1988-11-10: [Pub. L. 100-647](/26/act/100-647.md), 102 Stat. 3634
- 1990-11-05: [Pub. L. 101-508](/26/act/101-508.md), 104 Stat. 1388