26 U.S.C. § 2503 — Taxable gifts

(a) General definition. “Taxable gifts” means all gifts made during the calendar year, minus deductions provided in subchapter C, beginning with section 2522.

(b) Exclusions from gifts. (1) For gifts other than future interests made by a donor to one person during the calendar year, the first $10,000 to that person is excluded from the total under subsection (a). For a present interest, the possibility that exercising a power could diminish it is ignored if no part will ever pass to anyone else. (2) For gifts after 1998, increase $10,000 by $10,000 multiplied by the section 1(f)(3) cost-of-living adjustment for that year, substituting “calendar year 1997” for “calendar year 2016” in subparagraph (A)(ii). If the result is not a multiple of $1,000, round down to the next lower multiple.

(c) Transfer for the benefit of minor. A gift to an individual under 21 is not a future interest if the property and income may be spent by or for the individual before 21, and any unspent part will pass to the individual at 21 or, if the individual dies before then, to the estate or as appointed under a general power of appointment defined in section 2514(c).

(d) Repealed. Public Law 97–34, title III, section 311(h)(5), repealed this subsection on August 13, 1981.

(e) Exclusion for certain educational or medical expenses. (1) A qualified transfer is not treated as a gift of property for this chapter. (2) A “qualified transfer” is an amount paid for an individual as tuition to an educational organization described in section 170(b)(1)(A)(ii), or to a person providing medical care, as defined in section 213(d), for that individual.

(f) Waiver of certain pension rights. A person’s pre-death waiver of a survivor benefit or right under section 401(a)(11) or 417 is not treated as a gift of property for this chapter.

(g) Treatment of certain loans of artworks. (1) A loan of a “qualified work of art” is not a transfer for this subtitle, and the work’s value is determined as if it were not loaned, if it is loaned to a section 501(c)(3) organization tax-exempt under section 501(c), other than a private foundation, and the organization’s use relates to its exempt purpose or function. (2)(A) “Qualified work of art” means archaeological, historic, or creative tangible personal property. (B) “Private foundation” has the section 509 meaning, except it does not include a private operating foundation defined in section 4942(j)(3).