r/title-26-INTERNAL-REVENUE-CODE wiki — defined terms
The statute’s own glossary: every term Title 26 defines, in section order.
“qualified opportunity zone stock” applies in that section
the term “qualified opportunity zone stock” means any stock in a domestic corporation if— (I) such stock is acquired by the qualified opportunity fund after December 31, 2017 , at its original issue (directly or through an underwriter) from the corporation solely in exchange for cash, (II) as of the time such stock was issued, such corporation was a qualified opportunity zone business (or, in the case of a new corporation, such corporation was being organized for purposes of being a qualified opportunity zone business), and (III) during substantially all of the qualified opportunity fund’s holding period for such stock, such corporation qualified as a qualified opportunity zone business.
“church employee income” applies in that section
the term “church employee income” means gross income for services which are described in section 3121(b)(8)(B) (and are not described in section 3121(b)(8)(A)). (k) Codification of treatment of certain termination payments received by former insurance salesmen Nothing in subsection (a) shall be construed as including in the net earnings from self-employment of an individual any amount received during the taxable year from an insurance company on account of services performed by such individual as an insurance salesman for such company if— (1) such amount is received after termination of such individual’s agreement to perform such services for such company, (2) such individual performs no …
“commodities dealer” applies in that section
The term “commodities dealer” means a person who is actively engaged in trading section 1256 contracts and is registered with a domestic board of trade which is designated as a contract market by the Commodities Futures Trading Commission. (C) Section 1256 contracts
“deceased partner’s distributive share” applies in that section
the term “deceased partner’s distributive share” includes the share of his estate or of any other person succeeding, by reason of his death, to rights with respect to his partnership interest. (g) Members of certain religious faiths (1) Exemption Any individual may file an application (in such form and manner, and with such official, as may be prescribed by regulations under this chapter) for an exemption from the tax imposed by this chapter if he is a member of a recognized religious sect or division thereof and is an adherent of established tenets or teachings of such sect or division by reason of which he is conscientiously opposed to acceptance of the benefits of any private or public …
“net earnings from self-employment” applies in that section
The term “net earnings from self-employment” means the gross income derived by an individual from any trade or business carried on by such individual, less the deductions allowed by this subtitle which are attributable to such trade or business, plus his distributive share (whether or not distributed) of income or loss described in section 702(a)(8) from any trade or business carried on by a partnership of which he is a member; except that in computing such gross income and deductions and such distributive share of partnership ordinary income or loss— (1) there shall be excluded rentals from real estate and from personal property leased with the real estate (including such rentals paid in …
“options dealer” applies in that section
The term “options dealer” has the meaning given such term by section 1256(g)(8). (B) Commodities dealer
“section 1256 contract” applies in that section
The term “section 1256 contract” has the meaning given to such term by section 1256(b). (j) Special rules for certain church employee income (1) Computation of net earnings In applying subsection (a)— (A) church employee income shall not be reduced by any deduction; (B) church employee income and deductions attributable to such income shall not be taken into account in determining the amount of other net earnings from self-employment. (2) Computation of self-employment income (A) Separate application of subsection (b)(2) Paragraph (2) of subsection (b) shall be applied separately— (i) to church employee income, and (ii) to other net earnings from self-employment.
“self-employment income” applies in that section
The term “self-employment income” means the net earnings from self-employment derived by an individual (other than a nonresident alien individual, except as provided by an agreement under section 233 of the Social Security Act) during any taxable year; except that such term shall not include— (1) in the case of the tax imposed by section 1401(a), that part of the net earnings from self-employment which is in excess of (i) an amount equal to the contribution and benefit base (as determined under section 230 of the Social Security Act) which is effective for the calendar year in which such taxable year begins, minus (ii) the amount of the wages paid to such individual during such taxable …
“modified adjusted gross income” applies throughout its chapter
the term “modified adjusted gross income” means adjusted gross income increased by the excess of— (1) the amount excluded from gross income under section 911(a)(1), over (2) the amount of any deductions (taken into account in computing adjusted gross income) or exclusions disallowed under section 911(d)(6) with respect to the amounts described in paragraph (1). (e) Nonapplication of section This section shall not apply to— (1) a nonresident alien, or (2) a trust all of the unexpired interests in which are devoted to one or more of the purposes described in section 170(c)(2)(B).
“net investment income” applies throughout its chapter
The term “net investment income” means the excess (if any) of— (A) the sum of— (i) gross income from interest, dividends, annuities, royalties, and rents, other than such income which is derived in the ordinary course of a trade or business not described in paragraph (2), (ii) other gross income derived from a trade or business described in paragraph (2), and (iii) net gain (to the extent taken into account in computing taxable income) attributable to the disposition of property other than property held in a trade or business not described in paragraph (2), over (B) the deductions allowed by this subtitle which are properly allocable to such gross income or net gain.
“threshold amount” applies throughout its chapter
the term “threshold amount” means— (1) in the case of a taxpayer making a joint return under section 6013 or a surviving spouse (as defined in section 2(a)), $250,000, (2) in the case of a married taxpayer (as defined in section 7703) filing a separate return, ½ of the dollar amount determined under paragraph (1), and (3) in any other case, $200,000. (c) Net investment income For purposes of this chapter— (1) In general
“nonresident alien individual” applies in that section
the term “nonresident alien individual” includes an alien resident of Puerto Rico. (f) Continental shelf areas For sources of income derived from, or for services performed with respect to, the exploration or exploitation of natural resources on submarine areas adjacent to the territorial waters of the United States, see section 638. (g) Cross reference For provision treating 85 percent of social security benefits as subject to withholding under this section, see section 871(a)(3).
“foreign person” applies in that section
The term “foreign person” means any person other than— (A) a United States person, and (B) except as otherwise provided by the Secretary, an entity with respect to which section 897 does not apply by reason of subsection (l) thereof. (4) Transferor’s maximum tax liability
“qualified substitute” applies in that section
The term “qualified substitute” means, with respect to a disposition of a United States real property interest— (A) the person (including any attorney or title company) responsible for closing the transaction, other than the transferor’s agent, and (B) the transferee’s agent.
“qualifying statement” applies in that section
the term “qualifying statement” means a statement by the Secretary that— (i) the transferor either— (I) has reached agreement with the Secretary (or such agreement has been reached by the transferee) for the payment of any tax imposed by section 871(b)(1) or 882(a)(1) on any gain recognized by the transferor on the disposition of the United States real property interest, or (II) is exempt from any tax imposed by section 871(b)(1) or 882(a)(1) on any gain recognized by the transferor on the disposition of the United States real property interest, and (ii) the transferor or transferee has satisfied any transferor’s unsatisfied withholding liability or has provided adequate security to cover …
“transferee” applies in that section
The term “transferee” means the person acquiring the United States real property interest. (3) Foreign person
“transferee’s agent” applies in that section
the term “transferee’s agent” means any person who represents the transferee— (A) in any negotiation with the transferor or any transferor’s agent related to the transaction, or (B) in settling the transaction. (5) Settlement officer not treated as transferor’s agent For purposes of this subsection, a person shall not be treated as a transferor’s agent or transferee’s agent with respect to any transaction merely because such person performs 1 or more of the following acts: (A) The receipt and the disbursement of any portion of the consideration for the transaction. (B) The recording of any document in connection with the transaction.
“transferor” applies in that section
The term “transferor” means the person disposing of the United States real property interest. (2) Transferee
“transferor’s agent” applies in that section
the term “transferor’s agent” means any person who represents the transferor— (A) in any negotiation with the transferee or any transferee’s agent related to the transaction, or (B) in settling the transaction. (4) Transferee’s agent For purposes of this subsection,
“transferor’s maximum tax liability” applies in that section
The term “transferor’s maximum tax liability” means, with respect to the disposition of any interest, the sum of— (A) the maximum amount which the Secretary determines could be imposed as tax under section 871(b)(1) or 882(a)(1) by reason of the disposition, plus (B) the amount the Secretary determines to be the transferor’s unsatisfied withholding liability with respect to such interest. (5) Transferor’s unsatisfied withholding liability
“transferor’s unsatisfied withholding liability” applies in that section
The term “transferor’s unsatisfied withholding liability” means the withholding obligation imposed by this section on the transferor’s acquisition of the United States real property interest or on the acquisition of a predecessor interest, to the extent such obligation has not been satisfied. (6) Qualified substitute
“applicable percentage” applies in that section
the term “applicable percentage” means— (A) the highest rate of tax specified in section 1 in the case of the portion of the effectively connected taxable income which is allocable under section 704 to foreign partners who are not corporations, and (B) the highest rate of tax specified in section 11(b) in the case of the portion of the effectively connected taxable income which is allocable under section 704 to foreign partners which are corporations. (c) Effectively connected taxable income For purposes of this section,
“effectively connected taxable income” applies in that section
the term “effectively connected taxable income” means the taxable income of the partnership which is effectively connected (or treated as effectively connected) with the conduct of a trade or business in the United States computed with the following adjustments: (1) Paragraph (1) of section 703(a) shall not apply. (2) The partnership shall be allowed a deduction for depletion with respect to oil and gas wells but the amount of such deduction shall be determined without regard to sections 613 and 613A. (3) There shall not be taken into account any item of income, gain, loss, or deduction to the extent allocable under section 704 to any partner who is not a foreign partner.
“foreign partner” applies in that section
the term “foreign partner” means any partner who is not a United States person. (f) Special rules for withholding on dispositions of partnership interests (1) In general Except as provided in this subsection, if any portion of the gain (if any) on any disposition of an interest in a partnership would be treated under section 864(c)(8) as effectively connected with the conduct of a trade or business within the United States, the transferee shall be required to deduct and withhold a tax equal to 10 percent of the amount realized on the disposition.
“expanded affiliated group” applies in that section
the term “expanded affiliated group” means an affiliated group as defined in section 1504(a), determined— (A) by substituting “more than 50 percent” for “at least 80 percent” each place it appears, and (B) without regard to paragraphs (2) and (3) of section 1504(b). A partnership or any other entity (other than a corporation) shall be treated as a member of an expanded affiliated group if such entity is controlled (within the meaning of section 954(d)(3)) by members of such group (including any entity treated as a member of such group by reason of this sentence).
“financial account” applies in that section
the term “financial account” means, with respect to any financial institution— (A) any depository account maintained by such financial institution, (B) any custodial account maintained by such financial institution, and (C) any equity or debt interest in such financial institution (other than interests which are regularly traded on an established securities market). Any equity or debt interest which constitutes a financial account under subparagraph (C) with respect to any financial institution shall be treated for purposes of this section as maintained by such financial institution. (3) United States owned foreign entity
“financial institution” applies in that section
the term “financial institution” means any entity that— (A) accepts deposits in the ordinary course of a banking or similar business, (B) as a substantial portion of its business, holds financial assets for the account of others, or (C) is engaged (or holding itself out as being engaged) primarily in the business of investing, reinvesting, or trading in securities (as defined in section 475(c)(2) without regard to the last sentence thereof), partnership interests, commodities (as defined in section 475(e)(2)), or any interest (including a futures or forward contract or option) in such securities, partnership interests, or commodities. (6) Recalcitrant account holder
“foreign financial institution” applies in that section
The term “foreign financial institution” means any financial institution which is a foreign entity. Except as otherwise provided by the Secretary, such term shall not include a financial institution which is organized under the laws of any possession of the United States. (5) Financial institution Except as otherwise provided by the Secretary,
“passthru payment” applies in that section
The term “passthru payment” means any withholdable payment or other payment to the extent attributable to a withholdable payment. (e) Affiliated groups (1) In general The requirements of subsections (b) and (c)(1) shall apply— (A) with respect to United States accounts maintained by the foreign financial institution, and (B) except as otherwise provided by the Secretary, with respect to United States accounts maintained by each other foreign financial institution (other than any foreign financial institution which meets the requirements of subsection (b)) which is a member of the same expanded affiliated group as such foreign financial institution.
“recalcitrant account holder” applies in that section
The term “recalcitrant account holder” means any account holder which— (A) fails to comply with reasonable requests for the information referred to in subsection (b)(1)(A) or (c)(1)(A), or (B) fails to provide a waiver described in subsection (b)(1)(F) upon request. (7) Passthru payment
“United States account” applies in that section
The term “United States account” means any financial account which is held by one or more specified United States persons or United States owned foreign entities. (B) Exception for certain accounts held by individuals Unless the foreign financial institution elects to not have this subparagraph apply, such term shall not include any depository account maintained by such financial institution if— (i) each holder of such account is a natural person, and (ii) with respect to each holder of such account, the aggregate value of all depository accounts held (in whole or in part) by such holder and maintained by the same financial institution which maintains such account does not exceed $50,000.
“United States owned foreign entity” applies in that section
The term “United States owned foreign entity” means any foreign entity which has one or more substantial United States owners. (4) Foreign financial institution
“non-financial foreign entity” applies in that section
the term “non-financial foreign entity” means any foreign entity which is not a financial institution (as defined in section 1471(d)(5)).
“foreign entity” applies throughout its chapter
The term “foreign entity” means any entity which is not a United States person.
“specified United States person” applies throughout its chapter
the term “specified United States person” means any United States person other than— (A) any corporation the stock of which is regularly traded on an established securities market, (B) any corporation which is a member of the same expanded affiliated group (as defined in section 1471(e)(2) without regard to the last sentence thereof) as a corporation the stock of which is regularly traded on an established securities market, (C) any organization exempt from taxation under section 501(a) or an individual retirement plan, (D) the United States or any wholly owned agency or instrumentality thereof, (E) any State, the District of Columbia, any possession of the United States, any political …
“substantial United States owner” applies throughout its chapter
The term “substantial United States owner” means— (i) with respect to any corporation, any specified United States person which owns, directly or indirectly, more than 10 percent of the stock of such corporation (by vote or value), (ii) with respect to any partnership, any specified United States person which owns, directly or indirectly, more than 10 percent of the profits interests or capital interests in such partnership, and (iii) in the case of a trust— (I) any specified United States person treated as an owner of any portion of such trust under subpart E of part I of subchapter J of chapter 1, and (II) to the extent provided by the Secretary in regulations or other guidance, any …
“withholdable payment” applies throughout its chapter
The term “withholdable payment” means— (i) any payment of interest (including any original issue discount), dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, and other fixed or determinable annual or periodical gains, profits, and income, if such payment is from sources within the United States, and (ii) any gross proceeds from the sale or other disposition of any property of a type which can produce interest or dividends from sources within the United States.
“withholding agent” applies throughout its chapter
The term “withholding agent” means all persons, in whatever capacity acting, having the control, receipt, custody, disposal, or payment of any withholdable payment. (5) Foreign entity
“specified financial institution payment” applies in that section
The term “specified financial institution payment” means any payment if the beneficial owner of such payment is a foreign financial institution. (3) Requirement to identify substantial United States owners No credit or refund shall be allowed or paid with respect to any tax properly deducted and withheld under this chapter unless the beneficial owner of the payment provides the Secretary such information as the Secretary may require to determine whether such beneficial owner is a United States owned foreign entity (as defined in section 1471(d)(3)) and the identity of any substantial United States owners of such entity.
“applicable preferred stock” applies in that section
The term “applicable preferred stock” means stock described in section 1504(a)(4) in the subsidiary which is— (i) issued after November 17, 1989 , and (ii) held by a person other than a member of the same affiliated group as the subsidiary.
“consolidated year” applies in that section
The term “consolidated year” means any taxable year for which the affiliated group makes a consolidated return. (C) Application of section 312(n)(7) not affected The reference in paragraph (1) to subsection (n) of section 312 shall be treated as not including a reference to paragraph (7) of such subsection.
“disqualified separately computed income” applies in that section
The term “disqualified separately computed income” means the portion of the separately computed taxable income of the subsidiary which does not exceed the dividends distributed by the subsidiary during the taxable year on applicable preferred stock. (B) Separately computed taxable income
“dual consolidated loss” applies in that section
the term “dual consolidated loss” means any net operating loss of a domestic corporation which is subject to an income tax of a foreign country on its income without regard to whether such income is from sources in or outside of such foreign country, or is subject to such a tax on a residence basis. (B) Special rule where loss not used under foreign law To the extent provided in regulations, the term “dual consolidated loss” shall not include any loss which, under the foreign income tax law, does not offset the income of any foreign corporation.
“group credit item” applies in that section
The term “group credit item” means any credit allowable under part IV of subchapter A of chapter 1 (other than section 34) to any other member of the affiliated group which includes the subsidiary and any carryover or carryback of any such credit. (3) Other definitions For purposes of this subsection— (A) Disqualified separately computed income
“group loss item” applies in that section
The term “group loss item” means any of the following items of any other member of the affiliated group which includes the subsidiary: (i) Any net operating loss and any net operating loss carryover or carryback under section 172. (ii) Any loss from the sale or exchange of any capital asset and any capital loss carryover or carryback under section 1212. (B) Group credit item
“intragroup stock” applies in that section
The term “intragroup stock” means any stock which— (i) is in a corporation which is or was a member of an affiliated group of corporations, and (ii) is held by another corporation which is or was a member of such group. Such term includes any other property the basis of which is determined (in whole or in part) by reference to the basis of stock described in the preceding sentence. (B) Consolidated year
“separately computed taxable income” applies in that section
The term “separately computed taxable income” means the separate taxable income of the subsidiary for the taxable year determined— (i) by taking into account gains and losses from the sale or exchange of a capital asset and section 1231 gains and losses, (ii) without regard to any net operating loss or capital loss carryover or carryback, and (iii) with such adjustments as the Secretary may prescribe. (C) Subsidiary
“subsidiary” applies in that section
The term “subsidiary” means any corporation which is a member of an affiliated group filing a consolidated return other than the common parent. (D) Applicable preferred stock
“affiliated group” applies in that section
The term “affiliated group” means— (A) 1 or more chains of includible corporations connected through stock ownership with a common parent corporation which is an includible corporation, but only if— (B) (i) the common parent owns directly stock meeting the requirements of paragraph (2) in at least 1 of the other includible corporations, and (ii) stock meeting the requirements of paragraph (2) in each of the includible corporations (except the common parent) is owned directly by 1 or more of the other includible corporations.
“includible corporation” applies throughout its chapter
the term “includible corporation” means any corporation except— (1) Corporations exempt from taxation under section 501. (2) Insurance companies subject to taxation under section 801. (3) Foreign corporations. (4) Regulated investment companies and real estate investment trusts subject to tax under subchapter M of chapter 1. (5) A DISC (as defined in section 992(a)(1)). (6) An S corporation.
“controlled group of corporations” applies throughout its part
the term “controlled group of corporations” means any group of— (1) Parent-subsidiary controlled group One or more chains of corporations connected through stock ownership with a common parent corporation if— (A) stock possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote or at least 80 percent of the total value of shares of all classes of stock of each of the corporations, except the common parent corporation, is owned (within the meaning of subsection (d)(1)) by one or more of the other corporations; and (B) the common parent corporation owns (within the meaning of subsection (d)(1)) stock possessing at least 80 percent of the total …
“employee” applies in that section
the term “employee” has the same meaning such term is given by paragraphs (1) and (2) of section 3121(d). (2) Operating rules (A) In general Except as provided in subparagraph (B), stock constructively owned by a person by reason of the application of paragraph (1), (2), (3), (4), (5), or (6) of subsection (e) shall, for purposes of applying such paragraphs, be treated as actually owned by such person. (B) Members of family Stock constructively owned by an individual by reason of the application of paragraph (5) or (6) of subsection (e) shall not be treated as owned by him for purposes of again applying such paragraphs in order to make another the constructive owner of such stock.
“adjusted taxable gifts” applies in that section
the term “adjusted taxable gifts” means the total amount of the taxable gifts (within the meaning of section 2503) made by the decedent after December 31, 1976 , other than gifts which are includible in the gross estate of the decedent. (c) Rate schedule If the amount with respect to which the tentative tax to be computed is: The tentative tax is: Not over $10,000 18 percent of such amount. Over $10,000 but not over $20,000 $1,800, plus 20 percent of the excess of such amount over $10,000. Over $20,000 but not over $40,000 $3,800, plus 22 percent of the excess of such amount over $20,000. Over $40,000 but not over $60,000 $8,200 plus 24 percent of the excess of such amount over $40,000.
“deceased spousal unused exclusion amount” applies in that section
the term “deceased spousal unused exclusion amount” means the lesser of— (A) the basic exclusion amount, or (B) the excess of— (i) the applicable exclusion amount of the last such deceased spouse of such surviving spouse, over (ii) the amount with respect to which the tentative tax is determined under section 2001(b)(1) on the estate of such deceased spouse.
“property” applies in that section
the term “property” includes any beneficial interest in property, including a general power of appointment (as defined in section 2041). (f) Treatment of additional tax imposed under section 2032A If section 2032A applies to any property included in the gross estate of the transferor and an additional tax is imposed with respect to such property under section 2032A(c) before the date which is 2 years after the date of the decedent’s death, for purposes of this section— (1) the additional tax imposed by section 2032A(c) shall be treated as a Federal estate tax payable with respect to the estate of the transferor; and (2) the value of such property and the amount of the taxable estate of the …
“acquisition indebtedness” applies in that section
The term “acquisition indebtedness” means, with respect to debt-financed property, the unpaid amount of— (I) the indebtedness incurred by the donor in acquiring such property, (II) the indebtedness incurred before the acquisition of such property if such indebtedness would not have been incurred but for such acquisition, (III) the indebtedness incurred after the acquisition of such property if such indebtedness would not have been incurred but for such acquisition and the incurrence of such indebtedness was reasonably foreseeable at the time of such acquisition, and (IV) the extension, renewal, or refinancing of an acquisition indebtedness.
“applicable percentage” applies in that section
the term “applicable percentage” means 40 percent reduced (but not below zero) by 2 percentage points for each percentage point (or fraction thereof) by which the value of the qualified conservation easement is less than 30 percent of the value of the land (determined without regard to the value of such easement and reduced by the value of any retained development right (as defined in paragraph (5))). The values taken into account under the preceding sentence shall be such values as of the date of the contribution referred to in paragraph (8)(B). [(3) Repealed. Pub. L. 113–295, div. A, title II, § 221(a)(96) , Dec. 19, 2014 , 128 Stat.
“debt-financed property” applies in that section
The term “debt-financed property” means any property with respect to which there is an acquisition indebtedness (as defined in clause (ii)) on the date of the decedent’s death. (ii) Acquisition indebtedness
“development right” applies in that section
the term “development right” means any right to use the land subject to the qualified conservation easement in which such right is retained for any commercial purpose which is not subordinate to and directly supportive of the use of such land as a farm for farming purposes (within the meaning of section 2032A(e)(5)). (6) Election The election under this subsection shall be made on or before the due date (including extensions) for filing the return of tax imposed by section 2001 and shall be made on such return. Such an election, once made, shall be irrevocable.
“land subject to a qualified conservation easement” applies in that section
The term “land subject to a qualified conservation easement” means land— (i) which is located in the United States or any possession of the United States, (ii) which was owned by the decedent or a member of the decedent’s family at all times during the 3-year period ending on the date of the decedent’s death, and (iii) with respect to which a qualified conservation easement has been made by an individual described in subparagraph (C), as of the date of the election described in paragraph (6). (B) Qualified conservation easement
“member of the decedent’s family” applies in that section
The term “member of the decedent’s family” means any member of the family (as defined in section 2032A(e)(2)) of the decedent. (9) Treatment of easements granted after death In any case in which the qualified conservation easement is granted after the date of the decedent’s death and on or before the due date (including extensions) for filing the return of tax imposed by section 2001, the deduction under section 2055(f) with respect to such easement shall be allowed to the estate but only if no charitable deduction is allowed under chapter 1 to any person with respect to the grant of such easement.
“qualified conservation easement” applies in that section
The term “qualified conservation easement” means a qualified conservation contribution (as defined in section 170(h)(1)) of a qualified real property interest (as defined in section 170(h)(2)(C)), except that clause (iv) of section 170(h)(4)(A) shall not apply, and the restriction on the use of such interest described in section 170(h)(2)(C) shall include a prohibition on more than a de minimis use for a commercial recreational activity.
“active management” applies in that section
The term “active management” means the making of the management decisions of a business (other than the daily operating decisions). (13) Special rules for woodlands (A) In general In the case of any qualified woodland with respect to which the executor elects to have this subparagraph apply, trees growing on such woodland shall not be treated as a crop. (B) Qualified woodland
“adjusted tax difference with respect to the estate” applies throughout its chapter
the term “adjusted tax difference with respect to the estate” means the excess of what would have been the estate tax liability but for subsection (a) over the estate tax liability. For purposes of this subparagraph,
“adjusted value” applies in that section
the term “adjusted value” means— (A) in the case of the gross estate, the value of the gross estate for purposes of this chapter (determined without regard to this section), reduced by any amounts allowable as a deduction under paragraph (4) of section 2053(a), or (B) in the case of any real or personal property, the value of such property for purposes of this chapter (determined without regard to this section), reduced by any amounts allowable as a deduction in respect of such property under paragraph (4) of section 2053(a).
“eligible qualified heir” applies in that section
the term “eligible qualified heir” means a qualified heir who— (i) is the surviving spouse of the decedent, (ii) has not attained the age of 21, (iii) is disabled (within the meaning of subsection (b)(4)(B)), or (iv) is a student. (D) Student For purposes of subparagraph (C), an individual shall be treated as a student with respect to periods during any calendar year if (and only if) such individual is a student (within the meaning of section 152(f)(2)) for such calendar year.
“estate tax liability” applies throughout its chapter
the term “estate tax liability” means the tax imposed by section 2001 reduced by the credits allowable against such tax. (D) Partial dispositions For purposes of this paragraph, where the qualified heir disposes of a portion of the interest acquired by (or passing to) such heir (or a predecessor qualified heir) or there is a cessation of use of such a portion— (i) the value determined under subsection (a) taken into account under subparagraph (A)(ii) with respect to such portion shall be its pro rata share of such value of such interest, and (ii) the adjusted tax difference attributable to the interest taken into account with respect to the transaction involving the second or any succeeding …
“farm” applies in that section
The term “farm” includes stock, dairy, poultry, fruit, furbearing animal, and truck farms, plantations, ranches, nurseries, ranges, greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities, and orchards and woodlands. (5) Farming purposes
“farming purposes” applies in that section
The term “farming purposes” means— (A) cultivating the soil or raising or harvesting any agricultural or horticultural commodity (including the raising, shearing, feeding, caring for, training, and management of animals) on a farm; (B) handling, drying, packing, grading, or storing on a farm any agricultural or horticultural commodity in its unmanufactured state, but only if the owner, tenant, or operator of the farm regularly produces more than one-half of the commodity so treated; and (C) (i) the planting, cultivating, caring for, or cutting of trees, or (ii) the preparation (other than milling) of trees for market.
“involuntary conversion” applies in that section
The term “involuntary conversion” means a compulsory or involuntary conversion within the meaning of section 1033. (B) Qualified replacement property
“member of the family” applies in that section
The term “member of the family” means, with respect to any individual, only— (A) an ancestor of such individual, (B) the spouse of such individual, (C) a lineal descendant of such individual, of such individual’s spouse, or of a parent of such individual, or (D) the spouse of any lineal descendant described in subparagraph (C). For purposes of the preceding sentence, a legally adopted child of an individual shall be treated as the child of such individual by blood.
“net share rental” applies in that section
the term “net share rental” means the excess of— (I) the value of the produce received by the lessor of the land on which such produce is grown, over (II) the cash operating expenses of growing such produce which, under the lease, are paid by the lessor. (C) Exception The formula provided by subparagraph (A) shall not be used— (i) where it is established that there is no comparable land from which the average annual gross cash rental may be determined, or (ii) where the executor elects to have the value of the farm for farming purposes determined and that there is no comparable land from which the average net share rental may be determined under paragraph (8).
“qualified exchange property” applies in that section
the term “qualified exchange property” means real property which is to be used for the qualified use set forth in subparagraph (A) or (B) of subsection (b)(2) under which the real property exchanged therefor originally qualified under subsection (a).
“qualified heir” applies in that section
The term “qualified heir” means, with respect to any property, a member of the decedent’s family who acquired such property (or to whom such property passed) from the decedent. If a qualified heir disposes of any interest in qualified real property to any member of his family, such member shall thereafter be treated as the qualified heir with respect to such interest. (2) Member of family
“qualified real property” applies in that section
the term “qualified real property” means real property located in the United States which was acquired from or passed from the decedent to a qualified heir of the decedent and which, on the date of the decedent’s death, was being used for a qualified use by the decedent or a member of the decedent’s family, but only if— (A) 50 percent or more of the adjusted value of the gross estate consists of the adjusted value of real or personal property which— (i) on the date of the decedent’s death, was being used for a qualified use by the decedent or a member of the decedent’s family, and (ii) was acquired from or passed from the decedent to a qualified heir of the decedent.
“qualified replacement property” applies in that section
The term “qualified replacement property” means any real property which is— (I) acquired in an exchange which qualifies under section 1031, or (II) the acquisition of which results in the nonrecognition of gain under section 1033. Such term shall only include property which is used for the same qualified use as the replaced property was being used before the exchange. (ii) Replaced property
“qualified use” applies in that section
the term “qualified use” means the devotion of the property to any of the following: (A) use as a farm for farming purposes, or (B) use in a trade or business other than the trade or business of farming. (3) Adjusted value For purposes of paragraph (1),
“qualified woodland” applies in that section
The term “qualified woodland” means any real property which— (i) is used in timber operations, and (ii) is an identifiable area of land such as an acre or other area for which records are normally maintained in conducting timber operations. (C) Timber operations
“replaced property” applies in that section
The term “replaced property” means— (I) the property transferred in the exchange which qualifies under section 1031, or (II) the property compulsorily or involuntarily converted (within the meaning of section 1033).
“timber operations” applies in that section
The term “timber operations” means— (i) the planting, cultivating, caring for, or cutting of trees, or (ii) the preparation (other than milling) of trees for market. (D) Election An election under subparagraph (A) shall be made on the return of the tax imposed by section 2001. Such election shall be made in such manner as the Secretary shall by regulations prescribe. Such an election, once made, shall be irrevocable.
“reversionary interest” applies in that section
the term “reversionary interest” includes a possibility that property transferred by the decedent— (1) may return to him or his estate, or (2) may be subject to a power of disposition by him, but such term does not include a possibility that the income alone from such property may return to him or become subject to a power of disposition by him. The value of a reversionary interest immediately before the death of the decedent shall be determined (without regard to the fact of the decedent’s death) by usual methods of valuation, including the use of tables of mortality and actuarial principles, under regulations prescribed by the Secretary.
“qualified joint interest” applies in that section
the term “qualified joint interest” means any interest in property held by the decedent and the decedent’s spouse as— (A) tenants by the entirety, or (B) joint tenants with right of survivorship, but only if the decedent and the spouse of the decedent are the only joint tenants.
“general power of appointment” applies in that section
The term “general power of appointment” means a power which is exercisable in favor of the decedent, his estate, his creditors, or the creditors of his estate; except that— (A) A power to consume, invade, or appropriate property for the benefit of the decedent which is limited by an ascertainable standard relating to the health, education, support, or maintenance of the decedent shall not be deemed a general power of appointment. (B) A power of appointment created on or before October 21, 1942 , which is exercisable by the decedent only in conjunction with another person shall not be deemed a general power of appointment.
“incident of ownership” applies in that section
the term “incident of ownership” includes a reversionary interest (whether arising by the express terms of the policy or other instrument or by operation of law) only if the value of such reversionary interest exceeded 5 percent of the value of the policy immediately before the death of the decedent. As used in this paragraph,
“reversionary interest” applies in that section
the term “reversionary interest” includes a possibility that the policy, or the proceeds of the policy, may return to the decedent or his estate, or may be subject to a power of disposition by him. The value of a reversionary interest at any time shall be determined (without regard to the fact of the decedent’s death) by usual methods of valuation, including the use of tables of mortality and actuarial principles, pursuant to regulations prescribed by the Secretary.
“property subject to claims” applies in that section
the term “property subject to claims” means property includible in the gross estate of the decedent which, or the avails of which, would under the applicable law, bear the burden of the payment of such deductions in the final adjustment and settlement of the estate, except that the value of the property shall be reduced by the amount of the deduction under section 2054 attributable to such property.
“qualified contribution” applies in that section
the term “qualified contribution” means any transfer of property to a qualified organization if the use of the property by the organization is related to the purpose or function constituting the basis for its exemption under section 501. (D) Qualified organization defined .— For purposes of this paragraph,
“qualified interest” applies in that section
the term “qualified interest” means an interest for which a deduction is allowable under subsection (a). (E) Limitation .— The deduction referred to in subparagraph (A) shall not exceed the amount of the deduction which would have been allowable for the reformable interest but for paragraph (2).
“qualified organization” applies in that section
the term “qualified organization” means any organization described in section 501(c)(3) other than a private foundation (as defined in section 509). For purposes of the preceding sentence, a private operating foundation (as defined in section 4942(j)(3)) shall not be treated as a private foundation.
“qualified reformation” applies in that section
the term “qualified reformation” means a change of a governing instrument by reformation, amendment, construction, or otherwise which changes a reformable interest into a qualified interest but only if— (i) any difference between— (I) the actuarial value (determined as of the date of the decedent’s death) of the qualified interest, and (II) the actuarial value (as so determined) of the reformable interest, does not exceed 5 percent of the actuarial value (as so determined) of the reformable interest, (ii) in the case of— (I) a charitable remainder interest, the nonremainder interest (before and after the qualified reformation) terminated at the same time, or (II) any other interest, the …
“reformable interest” applies in that section
The term “reformable interest” means any interest for which a deduction would be allowable under subsection (a) at the time of the decedent’s death but for paragraph (2). (ii) Beneficiary’s interest must be fixed .— The term “reformable interest” does not include any interest unless, before the remainder vests in possession, all payments to persons other than an organization described in subsection (a) are expressed either in specified dollar amounts or a fixed percentage of the fair market value of the property. For purposes of determining whether all such payments are expressed as a fixed percentage of the fair market value of the property, section 664(d)(3) shall be taken into account.
“wholly charitable trust” applies in that section
the term “wholly charitable trust” means a charitable trust which, upon the allowance of a deduction, would be described in section 4947(a)(1). (G) Statute of limitations .— The period for assessing any deficiency of any tax attributable to the application of this paragraph shall not expire before the date 1 year after the date on which the Secretary is notified that such reformation (or other proceeding pursuant to subparagraph (J)) has occurred.
“work of art” applies in that section
the term “work of art” means any tangible personal property with respect to which there is a copyright under Federal law. (C) Qualified contribution defined .— For purposes of this paragraph,
“charitable beneficiary” applies in that section
The term “charitable beneficiary” means any beneficiary which is an organization described in section 170(c). (ii) ESOP beneficiary
“ESOP beneficiary” applies in that section
The term “ESOP beneficiary” means any beneficiary which is an employee stock ownership plan (as defined in section 4975(e)(7)) that holds a remainder interest in qualified employer securities (as defined in section 664(g)(4)) to be transferred to such plan in a qualified gratuitous transfer (as defined in section 664(g)(1)). (iii) Qualified charitable remainder trust
“property” applies in that section
The term “property” includes an interest in property. (iv) Specific portion treated as separate property A specific portion of property shall be treated as separate property. (v) Election An election under this paragraph with respect to any property shall be made by the executor on the return of tax imposed by section 2001. Such an election, once made, shall be irrevocable.
“qualified charitable remainder trust” applies in that section
The term “qualified charitable remainder trust” means a charitable remainder annuity trust or a charitable remainder unitrust (described in section 664). (9) Denial of double deduction Nothing in this section or any other provision of this chapter shall allow the value of any interest in property to be deducted under this chapter more than once with respect to the same decedent. (10) Specific portion For purposes of paragraphs (5), (6), and (7)(B)(iv), the term “specific portion” only includes a portion determined on a fractional or percentage basis.
“qualified terminable interest property” applies in that section
The term “qualified terminable interest property” means property— (I) which passes from the decedent, (II) in which the surviving spouse has a qualifying income interest for life, and (III) to which an election under this paragraph applies. (ii) Qualifying income interest for life The surviving spouse has a qualifying income interest for life if— (I) the surviving spouse is entitled to all the income from the property, payable annually or at more frequent intervals, or has a usufruct interest for life in the property, and (II) no person has a power to appoint any part of the property to any person other than the surviving spouse.
“income” applies in that section
the term “income” has the meaning given to such term by section 643(b). (3) Trust To the extent provided in regulations prescribed by the Secretary,
“property” applies in that section
The term “property” includes an interest in property. (2) Income Except as provided in regulations,
“qualified domestic trust” applies in that section
the term “qualified domestic trust” means, with respect to any decedent, any trust if— (1) the trust instrument— (A) except as provided in regulations prescribed by the Secretary, requires that at least 1 trustee of the trust be an individual citizen of the United States or a domestic corporation, and (B) provides that no distribution (other than a distribution of income) may be made from the trust unless a trustee who is an individual citizen of the United States or a domestic corporation has the right to withhold from such distribution the tax imposed by this section on such distribution, (2) such trust meets such requirements as the Secretary may by regulations prescribe to ensure the …
“taxable event” applies in that section
The term “taxable event” means the event resulting in tax being imposed under paragraph (1). (10) Certain benefits allowed (A) In general If any property remaining in the qualified domestic trust on the date of the death of the surviving spouse is includible in the gross estate of such spouse for purposes of this chapter (or would be includible if such spouse were a citizen or resident of the United States), any benefit which is allowable (or would be allowable if such spouse were a citizen or resident of the United States) with respect to such property to the estate of such spouse under section 2014, 2032, 2032A, 2055, 2056, 2058, or 6166 shall be allowed for purposes of the tax imposed by …
“trust” applies in that section
the term “trust” includes other arrangements which have substantially the same effect as a trust. (d) Election An election under this section with respect to any trust shall be made by the executor on the return of the tax imposed by section 2001. Such an election, once made, shall be irrevocable. No election may be made under this section on any return if such return is filed more than one year after the time prescribed by law (including extensions) for filing such return.
“adjusted taxable gifts” applies in that section
the term “adjusted taxable gifts” means the total amount of the taxable gifts (within the meaning of section 2503 as modified by section 2511) made by the decedent after December 31, 1976 , other than gifts which are includible in the gross estate of the decedent. (2) Adjustment for certain gift tax For purposes of this section, the rules of section 2001(d) shall apply.
“State death taxes” applies in that section
the term “State death taxes” means the taxes described in section 2058(a). (b) Condition of allowance of deductions No deduction shall be allowed under paragraphs (1) and (2) of subsection (a) in the case of a nonresident not a citizen of the United States unless the executor includes in the return required to be filed under section 6018 the value at the time of his death of that part of the gross estate of such nonresident not situated in the United States.
“qualified decedent” applies in that section
the term “qualified decedent” means— (1) any citizen or resident of the United States dying while in active service of the Armed Forces of the United States, if such decedent— (A) was killed in action while serving in a combat zone, as determined under section 112(c), or (B) died as a result of wounds, disease, or injury suffered while serving in a combat zone (as determined under section 112(c)), and while in the line of duty, by reason of a hazard to which such decedent was subjected as an incident of such service, (2) any specified terrorist victim (as defined in section 692(d)(4)), and (3) any astronaut whose death occurs in the line of duty.
“calendar year 1932” applies throughout this title
the term “calendar year 1932” includes only that portion of such year after June 6, 1932 . (c) Tax to be paid by donor The tax imposed by section 2501 shall be paid by the donor.
“preceding calendar period” applies throughout this title
the term “preceding calendar period” means— (1) calendar years 1932 and 1970 and all calendar years intervening between calendar year 1932 and calendar year 1970, (2) the first calendar quarter of calendar year 1971 and all calendar quarters intervening between such calendar quarter and the first calendar quarter of calendar year 1982, and (3) all calendar years after 1981 and before the calendar year for which the tax is being computed. For purposes of paragraph (1),
“private foundation” applies in that section
The term “private foundation” has the meaning given such term by section 509, except that such term shall not include any private operating foundation (as defined in section 4942(j)(3)).
“qualified transfer” applies in that section
the term “qualified transfer” means any amount paid on behalf of an individual— (A) as tuition to an educational organization described in section 170(b)(1)(A)(ii) for the education or training of such individual, or (B) to any person who provides medical care (as defined in section 213(d)) with respect to such individual as payment for such medical care. (f) Waiver of certain pension rights If any individual waives, before the death of a participant, any survivor benefit, or right to such benefit, under section 401(a)(11) or 417, such waiver shall not be treated as a transfer of property by gift for purposes of this chapter.
“qualified work of art” applies in that section
The term “qualified work of art” means any archaeological, historic, or creative tangible personal property. (B) Private foundation
“taxable gifts” applies in that section
The term “taxable gifts” means the total amount of gifts made during the calendar year, less the deductions provided in subchapter C (section 2522 and following). (b) Exclusions from gifts (1) In general In the case of gifts (other than gifts of future interests in property) made to any person by the donor during the calendar year, the first $10,000 of such gifts to such person shall not, for purposes of subsection (a), be included in the total amount of gifts made during such year.
“general power of appointment” applies in that section
the term “general power of appointment” means a power which is exercisable in favor of the individual possessing the power (hereafter in this subsection referred to as the “possessor”), his estate, his creditors, or the creditors of his estate; except that— (1) A power to consume, invade, or appropriate property for the benefit of the possessor which is limited by an ascertainable standard relating to the health, education, support, or maintenance of the possessor shall not be deemed a general power of appointment.
“qualified disclaimer” applies in that section
the term “qualified disclaimer” means an irrevocable and unqualified refusal by a person to accept an interest in property but only if— (1) such refusal is in writing, (2) such writing is received by the transferor of the interest, his legal representative, or the holder of the legal title to the property to which the interest relates not later than the date which is 9 months after the later of— (A) the day on which the transfer creating the interest in such person is made, or (B) the day on which such person attains age 21, (3) such person has not accepted the interest or any of its benefits, and (4) as a result of such refusal, the interest passes without any direction on the part of the …
“initial fractional contribution” applies in that section
the term “initial fractional contribution” means, with respect to any donor, the first gift of an undivided portion of the donor’s entire interest in any tangible personal property for which a deduction is allowed under subsection (a) or (b). (f) Cross references (1) For treatment of certain organizations providing child care, see section 501(k). (2) For exemption of certain gifts to or for the benefit of the United States and for rules of construction with respect to certain bequests, see section 2055(f). (3) For treatment of gifts to or for the use of Indian tribal governments (or their subdivisions), see section 7871.
“charitable beneficiary” applies throughout its chapter
the term “charitable beneficiary” and “qualified charitable remainder trust” have the meanings given to such terms by section 2056(b)(8)(B). (h) Denial of double deduction Nothing in this section or any other provision of this chapter shall allow the value of any interest in property to be deducted under this chapter more than once with respect to the same donor.
“qualified charitable remainder trust” applies throughout its chapter
the term “charitable beneficiary” and “qualified charitable remainder trust” have the meanings given to such terms by section 2056(b)(8)(B). (h) Denial of double deduction Nothing in this section or any other provision of this chapter shall allow the value of any interest in property to be deducted under this chapter more than once with respect to the same donor.
“qualified terminable interest property” applies in that section
the term “qualified terminable interest property” means any property— (A) which is transferred by the donor spouse, (B) in which the donee spouse has a qualifying income interest for life, and (C) to which an election under this subsection applies. (3) Certain rules made applicable For purposes of this subsection, rules similar to the rules of clauses (ii), (iii), and (iv) of section 2056(b)(7)(B) shall apply and the rules of section 2056(b)(10) shall apply.
“generation-skipping transfer” applies throughout its chapter
the term “generation-skipping transfer” means— (1) a taxable distribution, (2) a taxable termination, and (3) a direct skip. (b) Certain transfers excluded The term “generation-skipping transfer” does not include— (1) any transfer which, if made inter vivos by an individual, would not be treated as a taxable gift by reason of section 2503(e) (relating to exclusion of certain transfers for educational or medical expenses), and (2) any transfer to the extent— (A) the property transferred was subject to a prior tax imposed under this chapter, (B) the transferee in the prior transfer was assigned to the same generation as (or a lower generation than) the generation assignment of the transferee …
“direct skip” applies throughout its chapter
The term “direct skip” means a transfer subject to a tax imposed by chapter 11 or 12 of an interest in property to a skip person. (2) Look-thru rules not to apply Solely for purposes of determining whether any transfer to a trust is a direct skip, the rules of section 2651(f)(2) shall not apply.
“taxable distribution” applies throughout its chapter
the term “taxable distribution” means any distribution from a trust to a skip person (other than a taxable termination or a direct skip). (c) Direct skip For purposes of this chapter— (1) In general
“taxable termination” applies throughout its chapter
the term “taxable termination” means the termination (by death, lapse of time, release of power, or otherwise) of an interest in property held in a trust unless— (A) immediately after such termination, a non-skip person has an interest in such property, or (B) at no time after such termination may a distribution (including distributions on termination) be made from such trust to a skip person.
“non-skip person” applies throughout its chapter
the term “non-skip person” means any person who is not a skip person.
“skip person” applies throughout its chapter
the term “skip person” means— (1) a natural person assigned to a generation which is 2 or more generations below the generation assignment of the transferor, or (2) a trust— (A) if all interests in such trust are held by skip persons, or (B) if— (i) there is no person holding an interest in such trust, and (ii) at no time after such transfer may a distribution (including distributions on termination) be made from such trust to a nonskip person. (b) Non-skip person For purposes of this chapter,
“GST trust” applies in that section
The term “GST trust” means a trust that could have a generation-skipping transfer with respect to the transferor unless— (i) the trust instrument provides that more than 25 percent of the trust corpus must be distributed to or may be withdrawn by one or more individuals who are non-skip persons— (I) before the date that the individual attains age 46, (II) on or before one or more dates specified in the trust instrument that will occur before the date that such individual attains age 46, or (III) upon the occurrence of an event that, in accordance with regulations prescribed by the Secretary, may reasonably be expected to occur before the date that such individual attains age 46, (ii) the …
“indirect skip” applies in that section
the term “indirect skip” means any transfer of property (other than a direct skip) subject to the tax imposed by chapter 12 made to a GST trust. (B) GST trust
“nonexempt portion” applies in that section
the term “nonexempt portion” means the value (at the time of allocation) of the property or trust, multiplied by the inclusion ratio with respect to such property or trust.
“applicable rate” applies throughout its chapter
the term “applicable rate” means, with respect to any generation-skipping transfer, the product of— (1) the maximum Federal estate tax rate, and (2) the inclusion ratio with respect to the transfer. (b) Maximum Federal estate tax rate For purposes of subsection (a),
“maximum Federal estate tax rate” applies throughout its chapter
the term “maximum Federal estate tax rate” means the maximum rate imposed by section 2001 on the estates of decedents dying at the time of the taxable distribution, taxable termination, or direct skip, as the case may be.
“charitable lead annuity” applies in that section
The term “charitable lead annuity” means any interest in the form of a guaranteed annuity with respect to which a deduction was allowed under section 2055 or 2522 (as the case may be). (4) Coordination with subsection (d) Under regulations, appropriate adjustments shall be made in the application of subsection (d) to take into account the provisions of this subsection.
“charitable lead annuity trust” applies in that section
The term “charitable lead annuity trust” means any trust in which there is a charitable lead annuity. (B) Charitable lead annuity
“estate tax inclusion period” applies in that section
the term “estate tax inclusion period” means any period after the transfer described in paragraph (1) during which the value of the property involved in such transfer would be includible in the gross estate of the transferor under chapter 11 if he died. Such period shall in no event extend beyond the earlier of— (A) the date on which there is a generation-skipping transfer with respect to such property, or (B) the date of the death of the transferor. (4) Treatment of spouse Except as provided in regulations, any reference in this subsection to an individual or transferor shall be treated as including a reference to the spouse of such individual or transferor.
“nontax portion” applies in that section
the term “nontax portion” means the product of— (A) the value of all of the property in the trust, and (B) the applicable fraction in effect for such trust. (4) Similar recomputation in case of certain late allocations If— (A) any allocation of the GST exemption to property transferred to a trust is not made on a timely filed gift tax return required by section 6019, and (B) there was a previous allocation with respect to property transferred to such trust, the applicable fraction for such trust shall be recomputed as of the time of such allocation under rules similar to the rules of paragraph (2).
“nontaxable gift” applies in that section
the term “nontaxable gift” means any transfer of property to the extent such transfer is not treated as a taxable gift by reason of— (A) section 2503(b) (taking into account the application of section 2513), or (B) section 2503(e). (d) Special rules where more than 1 transfer made to trust (1) In general If a transfer of property is made to a trust in existence before such transfer, the applicable fraction for such trust shall be recomputed as of the time of such transfer in the manner provided in paragraph (2).
“qualified severance” applies throughout its chapter
The term “qualified severance” means the division of a single trust and the creation (by any means available under the governing instrument or under local law) of two or more trusts if— (I) the single trust was divided on a fractional basis, and (II) the terms of the new trusts, in the aggregate, provide for the same succession of interests of beneficiaries as are provided in the original trust.
“executor” applies throughout its chapter
the term “executor” has the meaning given such term by section 2203.
“transferor” applies in that section
the term “transferor” means— (A) in the case of any property subject to the tax imposed by chapter 11, the decedent, and (B) in the case of any property subject to the tax imposed by chapter 12, the donor. An individual shall be treated as transferring any property with respect to which such individual is the transferor. (2) Gift-splitting by married couples If, under section 2513, one-half of a gift is treated as made by an individual and one-half of such gift is treated as made by the spouse of such individual, such gift shall be so treated for purposes of this chapter.
“trust” applies throughout its chapter
The term “trust” includes any arrangement (other than an estate) which, although not a trust, has substantially the same effect as a trust. (2) Trustee In the case of an arrangement which is not a trust but which is treated as a trust under this subsection,
“trustee” applies throughout its chapter
the term “trustee” shall mean the person in actual or constructive possession of the property subject to such arrangement. (3) Examples Arrangements to which this subsection applies include arrangements involving life estates and remainders, estates for years, and insurance and annuity contracts.
“applicable family member” applies in that section
the term “applicable family member” includes any lineal descendant of any parent of the transferor or the transferor’s spouse. (c) Distribution and other rights; qualified payments For purposes of this section— (1) Distribution right (A) In general
“applicable retained interest” applies in that section
The term “applicable retained interest” means any interest in an entity with respect to which there is— (A) a distribution right, but only if, immediately before the transfer described in subsection (a)(1), the transferor and applicable family members hold (after application of subsection (e)(3)) control of the entity, or (B) a liquidation, put, call, or conversion right. (2) Control For purposes of paragraph (1)— (A) Corporations In the case of a corporation,
“control” applies in that section
the term “control” means the holding of at least 50 percent (by vote or value) of the stock of the corporation. (B) Partnerships In the case of a partnership,
“distribution right” applies in that section
The term “distribution right” means— (i) a right to distributions from a corporation with respect to its stock, and (ii) a right to distributions from a partnership with respect to a partner’s interest in the partnership. (B) Exceptions The term “distribution right” does not include— (i) a right to distributions with respect to any interest which is junior to the rights of the transferred interest, (ii) any liquidation, put, call, or conversion right, or (iii) any right to receive any guaranteed payment described in section 707(c) of a fixed amount. (2) Liquidation, etc. rights (A) In general
“equity interest” applies in that section
The term “equity interest” means stock or any interest as a partner, as the case may be. (b) Applicable retained interests For purposes of this section— (1) In general
“junior equity interest” applies in that section
The term “junior equity interest” means common stock or, in the case of a partnership, any partnership interest under which the rights as to income and capital (or, to the extent provided in regulations, the rights as to either income or capital) are junior to the rights of all other classes of equity interests. (ii) Equity interest
“liquidation, put, call, or conversion right” applies in that section
The term “liquidation, put, call, or conversion right” means any liquidation, put, call, or conversion right, or any similar right, the exercise or nonexercise of which affects the value of the transferred interest. (B) Exception for fixed rights (i) In general The term “liquidation, put, call, or conversion right” does not include any right which must be exercised at a specific time and at a specific amount. (ii) Treatment of certain rights If a right is assumed to be exercised in a particular manner under subsection (a)(3)(B), such right shall be treated as so exercised for purposes of clause (i).
“member of the family” applies in that section
The term “member of the family” means, with respect to any transferor— (A) the transferor’s spouse, (B) a lineal descendant of the transferor or the transferor’s spouse, and (C) the spouse of any such descendant. (2) Applicable family member
“qualified payment” applies in that section
the term “qualified payment” means any dividend payable on a periodic basis under any cumulative preferred stock (or a comparable payment under any partnership interest) to the extent that such dividend (or comparable payment) is determined at a fixed rate. (B) Treatment of variable rate payments For purposes of subparagraph (A), a payment shall be treated as fixed as to rate if such payment is determined at a rate which bears a fixed relationship to a specified market interest rate.
“taxable event” applies in that section
The term “taxable event” means any of the following: (i) The death of the transferor if the applicable retained interest conferring the distribution right is includible in the estate of the transferor. (ii) The transfer of such applicable retained interest. (iii) At the election of the taxpayer, the payment of any qualified payment after the period described in paragraph (2)(C), but only with respect to such payment. (B) Exception where spouse is transferee (i) Deathtime transfers Subparagraph (A)(i) shall not apply to any interest includible in the gross estate of the transferor if a deduction with respect to such interest is allowable under section 2056 or 2106(a)(3).
“incomplete gift” applies in that section
the term “incomplete gift” means any transfer which would not be treated as a gift whether or not consideration was received for such transfer. (b) Qualified interest For purposes of this section,