26 U.S.C. § 2501 — Imposition of tax

(a) Taxable transfers. (1) General rule. A tax calculated under section 2502 is imposed for each calendar year on property transferred by gift during that year by any resident or nonresident individual. (2) Transfers of intangible property. Except as paragraph (3) provides, paragraph (1) does not apply to an intangible-property transfer by a nonresident who is not a United States citizen. (3) Exception. (A) Certain individuals. Paragraph (2) does not apply to a donor to whom section 877(b) applies for the taxable year^* including the transfer date. (B) Credit for foreign gift taxes. Tax imposed solely because of this paragraph is credited with gift tax actually paid to a foreign country on a gift taxable solely because of this paragraph. (4) Transfers to political organizations. Paragraph (1) does not apply to money or property transferred for a political organization’s use, where “political organization” has the meaning in section 527(e)(1). (5) Transfers of certain stock^*. (A) If such a donor transfers stock in a foreign corporation^* described in (B), section 2511(a) applies without regard to whether the stock is situated in the United States, and the stock’s value for this chapter is its U.S.-asset value under (C). (B) A corporation is described if, at transfer, the donor owns at least 10 percent of all voting power under section 958(a), and owns or is treated as owning under section 958(b) more than 50 percent of either all voting power or total stock value. (C) U.S.-asset value is the amount bearing the same ratio to the stock’s fair market value as the fair market value of the corporation’s United States-situated assets bears to the fair market value of all its assets, measured at transfer. (6) Transfers to certain exempt organizations. Paragraph (1) does not apply to money or property transferred for an organization’s use if it is described in section 501(c)(4), (5), or (6) and exempt under section 501(a). (b) Certain residents of possessions considered citizens of the United States. For this chapter’s tax, a United States citizen residing in a possession is treated as a “citizen” wherever that term is used in this title, unless citizenship was acquired solely because of citizenship, birth, or residence in that possession. (c) Certain residents of possessions considered nonresidents not citizens of the United States. Such a donor is treated as a “nonresident not a citizen of the United States” wherever that term is used, but only if citizenship was acquired solely for one of those possession-related reasons. (d) Cross references. (1) Section 1015(d) concerns increasing property basis for gift tax paid. (2) Section 2511(a) concerns excluding transfers outside the United States by a nonresident who is not a citizen.