26 USC 2031 - Definition of gross estate

View all text of Part III [§ 2031 - § 2046]

§ 2031. Definition of gross estate

(a) General

(b) Valuation of unlisted stock and securities

(1) In general

If the executor makes the election described in paragraph (6), then, except as otherwise provided in this subsection, there shall be excluded from the gross estate the lesser of—

(A) the applicable percentage of the value of land subject to a qualified conservation easement, reduced by the amount of any deduction under section 2055(f) with respect to such land, or

(B) $500,000.

(2) Applicable percentage

[(3) Repealed. Pub. L. 113–295, div. A, title II, § 221(a)(96), Dec. 19, 2014, 128 Stat. 4051]

(4) Treatment of certain indebtedness

(A) In general

(B) Definitions

For purposes of this paragraph—

(i) Debt-financed property

(ii) Acquisition indebtedness

The term “acquisition indebtedness” means, with respect to debt-financed property, the unpaid amount of—

(I) the indebtedness incurred by the donor in acquiring such property,(II) the indebtedness incurred before the acquisition of such property if such indebtedness would not have been incurred but for such acquisition,(III) the indebtedness incurred after the acquisition of such property if such indebtedness would not have been incurred but for such acquisition and the incurrence of such indebtedness was reasonably foreseeable at the time of such acquisition, and(IV) the extension, renewal, or refinancing of an acquisition indebtedness.

(5) Treatment of retained development right

(A) In general

(B) Termination of retained development right

Any failure to implement the agreement described in subparagraph (B) not later than the earlier of—

(i) the date which is 2 years after the date of the decedent’s death, or

(ii) the date of the sale of such land subject to the qualified conservation easement,

shall result in the imposition of an additional tax in the amount of the tax which would have been due on the retained development rights subject to such agreement. Such additional tax shall be due and payable on the last day of the 6th month following such date.

(D) Development right defined

(6) Election

(7) Calculation of estate tax due

(8) Definitions

For purposes of this subsection—

(A) Land subject to a qualified conservation easement

The term “land subject to a qualified conservation easement” means land—

(i) which is located in the United States or any possession of the United States,

(ii) which was owned by the decedent or a member of the decedent’s family at all times during the 3-year period ending on the date of the decedent’s death, and

(iii) with respect to which a qualified conservation easement has been made by an individual described in subparagraph (C), as of the date of the election described in paragraph (6).

(B) Qualified conservation easement

An individual is described in this subparagraph if such individual is—

(i) the decedent,

(ii) a member of the decedent’s family,

(iii) the executor of the decedent’s estate, or

(iv) the trustee of a trust the corpus of which includes the land to be subject to the qualified conservation easement.

(D) Member of family

(9) Treatment of easements granted after death

(10) Application of this section to interests in partnerships, corporations, and trusts

(d) Cross reference

(Aug. 16, 1954, ch. 736, 68A Stat. 380; Pub. L. 87–834, § 18(a)(1), Oct. 16, 1962, 76 Stat. 1052; Pub. L. 94–455, title XX, § 2008(a)(2)(A), Oct. 4, 1976, 90 Stat. 1891; Pub. L. 105–34, title V, § 508(a), Aug. 5, 1997, 111 Stat. 857; Pub. L. 105–206, title VI, § 6007(g), July 22, 1998, 112 Stat. 810; Pub. L. 105–277, div. J, title IV, § 4006(c)(3), Oct. 21, 1998, 112 Stat. 2681–913; Pub. L. 107–16, title V, § 551(a), (b), June 7, 2001, 115 Stat. 86; Pub. L. 113–295, div. A, title II, § 221(a)(96), (97)(B), Dec. 19, 2014, 128 Stat. 4051; Pub. L. 115–141, div. U, title IV, § 401(a)(200), (201), Mar. 23, 2018, 132 Stat. 1193.)