26 U.S.C. § 2801 — Imposition of tax

Page 2675 TITLE 26—INTERNAL REVENUE CODE § 2801 (A) there is a transfer of an interest in a corporation or partnership to (or for the ben- efit of) a member of the transferor’s family, and (B) the transferor and members of the transferor’s family hold, immediately before the transfer, control of the entity, any applicable restriction shall be disregarded in determining the value of the transferred in- terest. (2) Applicable restriction For purposes of this subsection, the term ‘‘applicable restriction’’ means any restric- tion— (A) which effectively limits the ability of the corporation or partnership to liquidate, and (B) with respect to which either of the fol- lowing applies: (i) The restriction lapses, in whole or in part, after the transfer referred to in para- graph (1). (ii) The transferor or any member of the transferor’s family, either alone or collec- tively, has the right after such transfer to remove, in whole or in part, the restric- tion. (3) Exceptions The term ‘‘applicable restriction’’ shall not include— (A) any commercially reasonable restric- tion which arises as part of any financing by the corporation or partnership with a person who is not related to the transferor or trans- feree, or a member of the family of either, or (B) any restriction imposed, or required to be imposed, by any Federal or State law. (4) Other restrictions The Secretary may by regulations provide that other restrictions shall be disregarded in determining the value of the transfer of any interest in a corporation or partnership to a member of the transferor’s family if such re- striction has the effect of reducing the value of the transferred interest for purposes of this subtitle but does not ultimately reduce the value of such interest to the transferee. (c) Definitions and special rules For purposes of this section— (1) Control The term ‘‘control’’ has the meaning given such term by section 2701(b)(2). (2) Member of the family The term ‘‘member of the family’’ means, with respect to any individual— (A) such individual’s spouse, (B) any ancestor or lineal descendant of such individual or such individual’s spouse, (C) any brother or sister of the individual, and (D) any spouse of any individual described in subparagraph (B) or (C). (3) Attribution The rule of section 2701(e)(3) shall apply for purposes of determining the interests held by any individual. (Added Pub. L. 101–508, title XI, § 11602(a), Nov. 5, 1990, 104 Stat. 1388–498; amended Pub. L. 104–188, title I, § 1702(f)(3)(C), Aug. 20, 1996, 110 Stat. 1871.) Editorial Notes AMENDMENTS 1996—Subsec. (c)(3). Pub. L. 104–188 substituted ‘‘sec- tion 2701(e)(3)’’ for ‘‘section 2701(e)(3)(A)’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1996 AMENDMENT Amendment by Pub. L. 104–188 effective, except as otherwise expressly provided, as if included in the pro- vision of the Revenue Reconciliation Act of 1990, Pub. L. 101–508, title XI, to which such amendment relates, see section 1702(i) of Pub. L. 104–188, set out as a note under section 38 of this title. CHAPTER 15—GIFTS AND BEQUESTS FROM EXPATRIATES Sec. 2801. Imposition of tax. § 2801. Imposition of tax (a) In general If, during any calendar year, any United States citizen or resident receives any covered gift or bequest, there is hereby imposed a tax equal to the product of— (1) the highest rate of tax specified in the table contained in section 2001(c) as in effect on the date of such receipt, and (2) the value of such covered gift or bequest. (b) Tax to be paid by recipient The tax imposed by subsection (a) on any cov- ered gift or bequest shall be paid by the person receiving such gift or bequest. (c) Exception for certain gifts Subsection (a) shall apply only to the extent that the value of covered gifts and bequests re- ceived by any person during the calendar year exceeds the dollar amount in effect under sec- tion 2503(b) for such calendar year. (d) Tax reduced by foreign gift or estate tax The tax imposed by subsection (a) on any cov- ered gift or bequest shall be reduced by the amount of any gift or estate tax paid to a for- eign country with respect to such covered gift or bequest. (e) Covered gift or bequest (1) In general For purposes of this chapter, the term ‘‘cov- ered gift or bequest’’ means— (A) any property acquired by gift directly or indirectly from an individual who, at the time of such acquisition, is a covered expa- triate, and (B) any property acquired directly or indi- rectly by reason of the death of an indi- vidual who, immediately before such death, was a covered expatriate. (2) Exceptions for transfers otherwise subject to estate or gift tax Such term shall not include— (A) any property shown on a timely filed return of tax imposed by chapter 12 which is a taxable gift by the covered expatriate, and Page 2676 TITLE 26—INTERNAL REVENUE CODE § 2801 1 Section numbers editorially supplied. 1 Section numbers editorially supplied. (B) any property included in the gross es- tate of the covered expatriate for purposes of chapter 11 and shown on a timely filed re- turn of tax imposed by chapter 11 of the es- tate of the covered expatriate. (3) Exceptions for transfers to spouse or char- ity Such term shall not include any property with respect to which a deduction would be al- lowed under section 2055, 2056, 2522, or 2523, whichever is appropriate, if the decedent or donor were a United States person. (4) Transfers in trust (A) Domestic trusts In the case of a covered gift or bequest made to a domestic trust— (i) subsection (a) shall apply in the same manner as if such trust were a United States citizen, and (ii) the tax imposed by subsection (a) on such gift or bequest shall be paid by such trust. (B) Foreign trusts (i) In general In the case of a covered gift or bequest made to a foreign trust, subsection (a) shall apply to any distribution attrib- utable to such gift or bequest from such trust (whether from income or corpus) to a United States citizen or resident in the same manner as if such distribution were a covered gift or bequest. (ii) Deduction for tax paid by recipient There shall be allowed as a deduction under section 164 the amount of tax im- posed by this section which is paid or ac- crued by a United States citizen or resi- dent by reason of a distribution from a for- eign trust, but only to the extent such tax is imposed on the portion of such distribu- tion which is included in the gross income of such citizen or resident. (iii) Election to be treated as domestic trust Solely for purposes of this section, a for- eign trust may elect to be treated as a do- mestic trust. Such an election may be re- voked with the consent of the Secretary. (f) Covered expatriate For purposes of this section, the term ‘‘cov- ered expatriate’’ has the meaning given to such term by section 877A(g)(1). (Added Pub. L. 110–245, title III, § 301(b)(1), June 17, 2008, 122 Stat. 1644; amended Pub. L. 113–295, div. A, title II, § 206(b)(1), Dec. 19, 2014, 128 Stat. 4027.) Editorial Notes AMENDMENTS 2014—Subsec. (a)(1). Pub. L. 113–295 struck out ‘‘(or, if greater, the highest rate of tax specified in the table applicable under section 2502(a) as in effect on the date)’’ after ‘‘such receipt’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2014 AMENDMENT Amendment by Pub. L. 113–295 effective as if included in the provisions of the Tax Relief, Unemployment In- surance Reauthorization, and Job Creation Act of 2010, Pub. L. 111–312, to which such amendment relates, see section 206(d) of Pub. L. 113–295, set out as a note under section 32 of this title. EFFECTIVE DATE Pub. L. 110–245, title III, § 301(g), June 17, 2008, 122 Stat. 1647, provided that: ‘‘(1) IN GENERAL.—Except as provided in this sub- section, the amendments made by this section [enact- ing this chapter and section 877A of this title and amending sections 877, 6039G, and 7701 of this title] shall apply to any individual whose expatriation date (as so defined) is on or after the date of the enactment of this Act [June 17, 2008]. ‘‘(2) GIFTS AND BEQUESTS.—Chapter 15 of the Internal Revenue Code of 1986 (as added by subsection (b)) shall apply to covered gifts and bequests (as defined in sec- tion 2801 of such Code, as so added) received on or after the date of the enactment of this Act from transferors (or from the estates of transferors) whose expatriation date is on or after such date of enactment.’’ Subtitle C—Employment Taxes Chapter Sec.1 21. Federal insurance contributions act ..... 3101 22. Railroad retirement tax act .................. 3201 23. Federal unemployment tax act ............. 3301 23A. Railroad Unemployment Repayment Tax ..................................................... 3321 24. Collection of income tax at source on wages .................................................. 3401 25. General provisions relating to employ- ment taxes ......................................... 3501 Editorial Notes AMENDMENTS 1983—Pub. L. 98–76, title II, § 231(c), Aug. 12, 1983, 97 Stat. 429, added item for chapter 23A. Pub. L. 98–67 repealed amendments made by Pub. L. 97–248. See 1982 Amendment note below. 1982—Pub. L. 97–248, title III, §§ 307(b)(1), (6), 308(a), Sept. 3, 1982, 96 Stat. 590, 591, provided that, applicable to payments of interest, dividends, and patronage divi- dends paid or credited after June 30, 1983, the heading of subtitle C is amended to read ‘‘Employment Taxes and Collection of Income Tax at Source’’, the caption of chapter 24 is amended by striking out ‘‘On Wages’’, and the caption of chapter 25 is amended by inserting ‘‘And Collection Of Income Taxes At Source’’ after ‘‘Employment Taxes’’. Section 102(a), (b) of Pub. L. 98–67, title I, Aug. 5, 1983, 97 Stat. 369, repealed subtitle A (§§ 301–308) of title III of Pub. L. 97–248 as of the close of June 30, 1983, and provided that the Internal Revenue Code of 1954 [now 1986] [this title] shall be applied and administered (subject to certain exceptions) as if such subtitle A (and the amendments made by such subtitle A) had not been enacted. CHAPTER 21—FEDERAL INSURANCE CONTRIBUTIONS ACT Subchapter Sec.1 A. Tax on employees .................................. 3101 B. Tax on employers .................................. 3111 C. General provisions ................................. 3121 D. Credits ................................................... 3131 Editorial Notes AMENDMENTS Pub. L. 117–2, title IX, § 9641(c), Mar. 11, 2021, 135 Stat. 171, added item for subchapter D.