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26 U.S.C. § 684 — Recognition of gain on certain transfers to certain foreign trusts and estates

Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 684 — Recognition of gain on certain transfers to certain foreign trusts and estates

**(a) In general** Except as provided in regulations, in the case of any transfer of property by a United States person to a foreign estate or trust, for purposes of this subtitle, such transfer shall be treated as a sale or exchange for an amount equal to the fair market value of the property transferred, and the transferor shall recognize as gain the excess of— (1) the fair market value of the property so transferred, over (2) the adjusted basis (for purposes of determining gain) of such property in the hands of the transferor. **(b) Exception** Subsection (a) shall not apply to a transfer to a trust by a United States person to the extent that any person is treated as the owner of such trust under section 671. **(c) Treatment of trusts which become foreign trusts** If a trust which is not a foreign trust becomes a foreign trust, such trust shall be treated for purposes of this section as having transferred, immediately before becoming a foreign trust, all of its assets to a foreign trust.

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Source location: Title 26, Chapter 1, § 684; chapter-001-normal-taxes-and-surtaxes.md

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Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 121 — Exclusion of gain from sale of principal residence

**(a) Exclusion** Gross income shall not include gain from the sale or exchange of property if, during the 5-year period ending on the date of the sale or exchange, such property has been owned and used by the taxpayer as the taxpayer’s principal residence for periods aggregating 2 years or more. **(b) Limitations** (1) **In general** — The amount of gain excluded from gross income under subsection (a) with respect to any sale or exchange shall not exceed $250,000. (2) **Special rules for joint returns** — In the case of a husband and wife who make a joint return for the taxable year of the sale or exchange of the property— (A) *$500,000 Limitation for certain joint returns* — Paragraph (1) shall be applied by substituting “$500,000” for “$250,000” if— (i) either spouse meets the ownership requirements of subsection (a) with respect to such property; (ii) both spouses meet the use requirements of subsection (a) with respect to such property; and (iii) neither spouse is ineligible for the benefits of subsection (a) with respect to such property by reason of paragraph (3). (B) *Other joint returns* — If such spouses do not meet the requirements of subparagraph (A), the limitation under paragraph (1) shall be the sum of the limitations under paragraph (1) to which each spouse would be entitled if such spouses had not been married. For purposes of the preceding sentence, each spouse shall be treated as owning the property during the period that either spouse owned the property. (3) **Application to only 1 sale or exchange every 2 years** — Subsection (a) shall not apply to any sale or exchange by the taxpayer if, during the 2-year period ending on the date of such sale or exchange, there was any other sale or exchange by the taxpayer to which subsec

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Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 1035 — Certain exchanges of insurance policies

**(a) General rules** No gain or loss shall be recognized on the exchange of— (1) a contract of life insurance for another contract of life insurance or for an endowment or annuity contract or for a qualified long-term care insurance contract; (2) a contract of endowment insurance (A) for another contract of endowment insurance which provides for regular payments beginning at a date not later than the date payments would have begun under the contract exchanged, or (B) for an annuity contract, or (C) for a qualified long-term care insurance contract; (3) an annuity contract for an annuity contract or for a qualified long-term care insurance contract; or (4) a qualified long-term care insurance contract for a qualified long-term care insurance contract. **(b) Definitions** For the purpose of this section— (1) **Endowment contract** — A contract of endowment insurance is a contract with an insurance company which depends in part on the life expectancy of the insured, but which may be payable in full in a single payment during his life. (2) **Annuity contract** — An annuity contract is a contract to which paragraph (1) applies but which may be payable during the life of the annuitant only in installments. For purposes of the preceding sentence, a contract shall not fail to be treated as an annuity contract solely because a qualified long-term care insurance contract is a part of or a rider on such contract. (3) **Life insurance contract** — A contract of life insurance is a contract to which paragraph (1) applies but which is not ordinarily payable in full during the life of the insured. For purposes of the preceding sentence, a contract shall not fail to be treated as a life insurance contract solely because a qualified long-term care insurance contract is a part o

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Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 367 — Foreign corporations

**(a) Transfers of property from the United States** (1) **General rule** — If, in connection with any exchange described in section 332, 351, 354, 356, or 361, a United States person transfers property to a foreign corporation, such foreign corporation shall not, for purposes of determining the extent to which gain shall be recognized on such transfer, be considered to be a corporation. (2) **Exception for certain stock or securities** — Except to the extent provided in regulations, paragraph (1) shall not apply to the transfer of stock or securities of a foreign corporation which is a party to the exchange or a party to the reorganization. (3) **Special rule for transfer of partnership interests** — Except as provided in regulations prescribed by the Secretary, a transfer by a United States person of an interest in a partnership to a foreign corporation in an exchange described in paragraph (1) shall, for purposes of this subsection, be treated as a transfer to such corporation of such person’s pro rata share of the assets of the partnership. (4) **Paragraph (2) not to apply to certain section 361 transactions** — Paragraph (2) shall not apply in the case of an exchange described in subsection (a) or (b) of section 361. Subject to such basis adjustments and such other conditions as shall be provided in regulations, the preceding sentence shall not apply if the transferor corporation is controlled (within the meaning of section 368(c)) by 5 or fewer domestic corporations. For purposes of the preceding sentence, all members of the same affiliated group (within the meaning of section 1504) shall be treated as 1 corporation. (5) **Secretary may exempt certain transactions from application of this subsection** — Paragraph (1) shall not apply to the transfer of any pro

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Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 721 — Nonrecognition of gain or loss on contribution

**(a) General rule** No gain or loss shall be recognized to a partnership or to any of its partners in the case of a contribution of property to the partnership in exchange for an interest in the partnership. **(b) Special rule** Subsection (a) shall not apply to gain realized on a transfer of property to a partnership which would be treated as an investment company (within the meaning of section 351) if the partnership were incorporated. **(c) Regulations relating to certain transfers to partnerships** The Secretary may provide by regulations that subsection (a) shall not apply to gain realized on the transfer of property to a partnership if such gain, when recognized, will be includible in the gross income of a person other than a United States person. **(d) Transfers of intangibles** For regulatory authority to treat intangibles transferred to a partnership as sold, see section 367(d)(3).

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Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 684 — Recognition of gain on certain transfers to

Page 1855 TITLE 26—INTERNAL REVENUE CODE § 685 Editorial Notes AMENDMENTS 1976—Pub. L. 94–455 substituted provisions relating to use of trust as an exchange fund for provisions setting forth rule that this part applies only to taxable years beginning after Dec. 31, 1953, and ending after the date of the enactment of this title and exceptions thereto. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1976 AMENDMENT Amendment of section by Pub. L. 94–455 effective on Apr. 8, 1976, in taxable years ending on or after such date, see section 2131(f)(6) of Pub. L. 94–455, set out as a note under section 584 of this title. § 684. Recognition of gain on certain transfers to certain foreign trusts and estates (a) In general Except as provided in regulations, in the case of any transfer of property by a United States person to a foreign estate or trust, for purposes of this subtitle, such transfer shall be treated as a sale or exchange for an amount equal to the fair market value of the property transferred, and the transferor shall recognize as gain the excess of— (1) the fair market value of the property so transferred, over (2) the adjusted basis (for purposes of deter- mining gain) of such property in the hands of the transferor. (b) Exception Subsection (a) shall not apply to a transfer to a trust by a United States person to the extent that any person is treated as the owner of such trust under section 671. (c) Treatment of trusts which become foreign trusts If a trust which is not a foreign trust becomes a foreign trust, such trust shall be treated for purposes of this section as having transferred, immediately before becoming a foreign trust, all of its assets to a foreign trust. (Added Pub. L. 105–34, title XI, § 1131(b), Au

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