26 U.S.C. § 273 — Holders of life or terminable interest

This section protects a person who holds a "life or terminable interest" — a right to income that lasts for someone's life, or that ends at a set time — when that interest came to them as a gift, a bequest, or an inheritance. Under the laws of a state, the District of Columbia, a U.S. possession, or a foreign country, the amount paid to that person as income cannot be reduced or diminished. Specifically, no deduction is allowed for "shrinkage" — meaning any drop in the value of the interest that happens simply because time has passed and the interest is running out — no matter what that kind of deduction is called.