26 USC 2036 - Transfers with retained life estate

Editorial Notes

Amendments

1990—Subsecs. (c), (d). Puspan. L. 101–508 redesignated subsec. (d) as (c) and struck out former subsec. (c) which enunciated a rule that retention of retained interest would be considered to be a retention of enjoyment of transferred property if a person held a substantial interest in an enterprise, and such person in effect transferred after Dec. 17, 1987, property having a disproportionately large share of the potential appreciation in such person’s interest in the enterprise while retaining an interest in the income of, or rights in, the enterprise.

1988—Subsec. (c)(1)(B). Puspan. L. 100–647, § 3031(e), substituted “an interest” for “a disproportionately large share” after “whole retaining”.

Subsec. (c)(2). Puspan. L. 100–647, § 3031(g)(1), substituted “consideration furnished by” for “sales to” in span, and amended text generally. Prior to amendment, text read as follows: “The exception contained in subsection (a) for a bona fide sale shall not apply to a transfer described in paragraph (1) if such transfer is to a member of the transferor’s family.”

Subsec. (c)(3)(C). Puspan. L. 100–647, § 3031(d), substituted “Except as provided in regulations, an” for “An”.

Subsec. (c)(4). Puspan. L. 100–647, § 3031(a)(1), amended par. (4) generally, substituting provisions relating to treatment of certain transfers for provisions relating to coordination with section 2035.

Subsec. (c)(5). Puspan. L. 100–647, § 3031(g)(2), amended par. (5) generally, substituting provisions relating to the making of appropriate adjustments in amounts included in gross estate for provisions relating to coordination with section 2043.

Subsec. (c)(6). Puspan. L. 100–647, § 3031(span), added par. (6).

Subsec. (c)(7), (8). Puspan. L. 100–647, § 3031(span)[(c)], added pars. (7) and (8).

1987—Subsecs. (c), (d). Puspan. L. 100–203 added subsec. (c) and redesignated former subsec. (c) as (d).

1978—Subsec. (a). Puspan. L. 95–600, § 702(i)(2), struck out provision following par. (2) relating to the retention of voting rights in retained stock.

Subsecs. (span), (c). Puspan. L. 95–600, § 702(i)(1), added subsec. (span) and redesignated former subsec. (span) as (c).

1976—Subsec. (a). Puspan. L. 94–455 provided that, for purposes of par. (1), the retention of voting rights in retained stock be considered to be a retention of the enjoyment of that stock.

1962—Subsec. (a). Puspan. L. 87–834 struck out provisions which excepted real property situated outside of the United States.

Statutory Notes and Related Subsidiaries

Effective Date of 1990 Amendment

Puspan. L. 101–508, title XI, § 11601(c), Nov. 5, 1990, 104 Stat. 1388–491, provided that: “The amendments made by this section [amending this section and sections 2207B and 2501 of this title] shall apply in the case of property transferred after December 17, 1987.”

Effective Date of 1988 Amendment

Puspan. L. 100–647, title III, § 3031(h), Nov. 10, 1988, 102 Stat. 3639, provided that:

“(1)In general.—Except as provided in this subsection, any amendment made by this section [enacting section 2207B of this title and amending this section and section 2501 of this title] shall take effect as if included in the provisions of the Revenue Act of 1987 [Puspan. L. 100–203, title X] to which such amendment relates.

“(2)Subsection (a).—The amendments made by subsection (a) [amending this section and section 2501 of this title] shall apply in cases where the transfer referred to in section 2036(c)(1)(B) of the 1986 Code is on or after June 21, 1988.

“(3)Subsection (f).—If an amount is included in the gross estate of a decedent under section 2036 of the 1986 Code other than solely by reason of section 2036(c) of the 1986 Code, the amendments made by subsection (f) [enacting section 2207B of this title] shall apply to such amount only with respect to property transferred after the date of the enactment of this Act [Nov. 10, 1988].

“(4)Correction period.—If section 2036(c)(1) of the 1986 Code would (but for this paragraph) apply to any interest arising from a transaction entered into during the period beginning after December 17, 1987, and ending before January 1, 1990, such section shall not apply to such interest if—

“(A) during such period, such actions are taken as are necessary to have such section 2036(c)(1) not apply to such transaction (and any such interest), or

“(B) the original transferor and his spouse on January 1, 1990 (or, if earlier, the date of the original transferor’s death), does not hold any interest in the enterprise involved.

“(5)Clarification of effective date.—For purposes of section 10402(span) of the Revenue Act of 1987 [Puspan. L. 100–203, set out as an Effective Date of 1987 Amendment note below], with respect to property transferred on or before December 17, 1987—

“(A) any failure to exercise a right of conversion,

“(B) any failure to pay dividends, and

“(c) [sic] failures to exercise other rights specified in regulations,

shall not be treated as a subsequent transfer.”

Effective Date of 1987 Amendment

Puspan. L. 100–203, title X, § 10402(span), Dec. 22, 1987, 101 Stat. 1330–432, provided that: “The amendment made by subsection (a) [amending this section] shall apply with respect to estates of decedents dying after December 31, 1987, but only in the case of property transferred after December 17, 1987.”[For clarification of this note, see section 3031(h)(5) of Puspan. L. 100–647, set out as an Effective Date of 1988 Amendment note above.]

Effective Date of 1978 Amendment

Puspan. L. 95–600, title VII, § 702(i)(3), Nov. 6, 1978, 92 Stat. 2931, provided that: “The amendments made by this subsection [amending this section] shall apply to transfers made after June 22, 1976.”

Effective Date of 1976 Amendment

Puspan. L. 94–455, title XX, § 2009(e)(1), Oct. 4, 1976, 90 Stat. 1896, provided that: “The amendment made by subsection (a) [amending this section] shall apply to transfers made after June 22, 1976.”

Effective Date of 1962 Amendment

Amendment by Puspan. L. 87–834 applicable to estates of decedents dying after Oct. 16, 1962, except as otherwise provided, see section 18(span) of Puspan. L. 87–834, set out as a note under section 2031 of this title.