26 U.S.C. § 102 — Gifts and inheritances

(a) General rule. Gross income does not include the value of property someone receives as a gift, bequest, devise, or inheritance. (b) Income. This exclusion in (a) does not cover: (1) income earned from property that was received as a gift, bequest, devise, or inheritance; or (2) if the gift, bequest, devise, or inheritance is itself a right to income from property, that income amount. If the gift, bequest, devise, or inheritance is paid out over time in installments, then, to the extent the payments come from the property's income, they still count as taxable income under (2). Likewise, any amount a beneficiary must include in gross income under subchapter J is treated as this same kind of taxable income under (2). (c) Employee gifts. (1) In general. The exclusion in (a) does not cover any amount an employer transfers to, or for the benefit of, an employee. (2) Cross references. Two other rules elsewhere in this title matter here: section 74(c) excludes certain employee achievement awards from gross income, and section 132(e) excludes certain small ("de minimis") fringe benefits from gross income.