# 26 U.S.C. § 2703: Certain rights and restrictions disregarded

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s2703>. Cite pinpoints as 26 U.S.C. § 2703(a)(1).

## § 2703(a) General rule

For purposes of this subtitle, the value of any property shall be determined without regard to—

**§ 2703(a)(1)** any option, agreement, or other right to acquire or use the property at a price less than the fair market value of the property (without regard to such option, agreement, or right), or

**§ 2703(a)(2)** any restriction on the right to sell or use such property.

## § 2703(b) Exceptions

Subsection (a) shall not apply to any option, agreement, right, or restriction which meets each of the following requirements:

**§ 2703(b)(1)** It is a bona fide business arrangement.

**§ 2703(b)(2)** It is not a device to transfer such property to members of the decedent’s family for less than full and adequate consideration in money or money’s worth.

**§ 2703(b)(3)** Its terms are comparable to similar arrangements entered into by persons in an arms’ length transaction.

## Regulations

- [Treas. Reg. § 25.2703-1](/26/reg/25.2703-1.md): Property subject to restrictive arrangements. (interprets § 2703)
- [Treas. Reg. § 25.2703-2](/26/reg/25.2703-2.md): Effective date. (interprets § 2703)

## Leading cases

- [Estate of True v. Commissioner, 390 F.3d 1210 (10th Cir. 2004)](https://www.courtlistener.com/opinion/165277/estate-of-true-v-commissioner/)
- [Holman v. Commissioner, 601 F.3d 763 (8th Cir. 2010)](https://www.courtlistener.com/opinion/1370/holman-v-commissioner/)
- [Estate of Strangi v. Commissioner, 115 T.C. 478 (2000)](https://www.courtlistener.com/opinion/4696537/estate-of-strangi-v-commissioner/)

## Amendments

- 1990-11-05: [Pub. L. 101-508](/26/act/101-508.md), 104 Stat. 1388