26 U.S.C. § 2040 — Joint interests

Page 2594 TITLE 26—INTERNAL REVENUE CODE § 2040 EFFECTIVE DATE OF 1983 AMENDMENT Amendment by Pub. L. 97–448 effective, except as oth- erwise provided, as if it had been included in the provi- sion of the Economic Recovery Tax Act of 1981, Pub. L. 97–34, to which such amendment relates, see section 109 of Pub. L. 97–448, set out as a note under section 1 of this title. EFFECTIVE DATE OF 1982 AMENDMENT Pub. L. 97–248, title II, § 245(c), Sept. 3, 1982, 96 Stat. 525, as amended by Pub. L. 98–369, div. A, title V, § 525(b)(3), July 18, 1984, 98 Stat. 874, provided that: ‘‘The amendments made by this section [amending this sec- tion] shall apply to the estates of decedents dying after December 31, 1982, except that such amendments shall not apply to the estate of any decedent who was a par- ticipant in any plan who was in pay status on Decem- ber 31, 1982, and irrevocably elected before January 1, 1983, the form of benefit.’’ EFFECTIVE DATE OF 1981 AMENDMENT Amendment by section 311(d)(1), (h)(4) of Pub. L. 97–34 applicable to taxable years beginning after Dec. 31, 1981, see section 311(i)(1) of Pub. L. 97–34, set out as a note under section 219 of this title. Amendment by section 313(b)(3) of Pub. L. 97–34 appli- cable to redemptions after Aug. 13, 1981, in taxable years ending after such date, see section 313(c) of Pub. L. 97–34, set out as a note under section 219 of this title. EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96–222 applicable with respect to the estates of decedents dying after Apr. 1, 1980, see section 101(b)(1)(D) of Pub. L. 96–222, set out as a note under section 691 of this title. EFFECTIVE DATE OF 1978 AMENDMENT Pub. L. 95–600, title I, § 142(c), Nov. 6, 1978, 92 Stat. 2796, provided that: ‘‘The amendments made by this section [amending this section] shall apply with re- spect to the estates of decedents dying after December 31, 1978.’’ Amendment by section 156(c)(4) of Pub. L. 95–600 ap- plicable to distributions or transfers made after Dec. 31, 1977, in taxable years beginning after such date, see section 156(d) of Pub. L. 95–600, set out as a note under section 403 of this title. Pub. L. 95–600, title VII, § 702(j)(3)(A), Nov. 6, 1978, 92 Stat. 2932, provided that: ‘‘The amendment made by paragraph (1) [amending this section] shall apply to the estates of decedents dying after December 31, 1976.’’ EFFECTIVE DATE OF 1976 AMENDMENT Pub. L. 94–455, title XX, § 2009(e)(3)(A), Oct. 4, 1976, 90 Stat. 1896, provided that: ‘‘The amendments made by paragraphs (1), (2), and (3) of subsection (c) [amending this section] shall apply to the estates of decedents dying after December 31, 1976.’’ EFFECTIVE DATE OF 1974 AMENDMENT Amendment by Pub. L. 93–406 applicable to taxable years ending on or after Sept. 21, 1972, with respect to individuals dying on or after Sept. 21, 1972, see section 2007(c) of Pub. L. 93–406, set out as a note under section 122 of this title. EFFECTIVE DATE OF 1972 AMENDMENT Pub. L. 92–580, § 2(b), Oct. 27, 1972, 86 Stat. 1276, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall apply with re- spect to estate of decedents for which the period pre- scribed by the Internal Revenue Code of 1986 [formerly I.R.C. 1954] for filing of a claim for credit or refund of an overpayment of estate tax ends on or after the date of enactment of this Act [Oct. 27, 1972]. No interest shall be allowed or paid on any overpayment of estate tax resulting from the application of the amendment made by subsection (a) for any period prior to the expi- ration of the one hundred and eightieth day following the date of the enactment of this Act.’’ EFFECTIVE DATE OF 1969 AMENDMENT Amendment by Pub. L. 91–172 effective Jan. 1, 1970, see section 101(k)(1) of Pub. L. 91–172, set out as an Ef- fective Date note under section 4940 of this title. EFFECTIVE DATE OF 1966 AMENDMENT Pub. L. 89–365, § 2(c), Mar. 8, 1966, 80 Stat. 33, provided that: ‘‘The amendments made by subsection (a) [amending this section] shall apply with respect to de- cedents dying after December 31, 1965. The amendments made by subsection (b) [amending section 2517 of this title] shall apply with respect to calendar years after 1965.’’ EFFECTIVE DATE OF 1962 AMENDMENT Amendment by Pub. L. 87–792 applicable to taxable years beginning after Dec. 31, 1962, see section 8 of Pub. L. 87–792, set out as a note under section 22 of this title. EFFECTIVE DATE OF 1958 AMENDMENT Amendment by section 23(e) of Pub. L. 85–866 applica- ble with respect to estates of decedents dying after Dec. 31, 1957, see section 23(g) of Pub. L. 85–866, set out as a note under section 403 of this title. Pub. L. 85–866, title I, § 67(b), Sept. 2, 1958, 72 Stat. 1659, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall apply with re- spect to estates of decedents dying after December 31, 1953.’’ PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989 For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title. § 2040. Joint interests (a) General rule The value of the gross estate shall include the value of all property to the extent of the inter- est therein held as joint tenants with right of survivorship by the decedent and any other per- son, or as tenants by the entirety by the dece- dent and spouse, or deposited, with any person carrying on the banking business, in their joint names and payable to either or the survivor, ex- cept such part thereof as may be shown to have originally belonged to such other person and never to have been received or acquired by the latter from the decedent for less than an ade- quate and full consideration in money or mon- ey’s worth: Provided, That where such property or any part thereof, or part of the consideration with which such property was acquired, is shown to have been at any time acquired by such other person from the decedent for less than an ade- quate and full consideration in money or mon- ey’s worth, there shall be excepted only such part of the value of such property as is propor- tionate to the consideration furnished by such other person: Provided further, That where any property has been acquired by gift, bequest, de- vise, or inheritance, as a tenancy by the en- tirety by the decedent and spouse, then to the extent of one-half of the value thereof, or, where Page 2595 TITLE 26—INTERNAL REVENUE CODE § 2041 so acquired by the decedent and any other per- son as joint tenants with right of survivorship and their interests are not otherwise specified or fixed by law, then to the extent of the value of a fractional part to be determined by dividing the value of the property by the number of joint tenants with right of survivorship. (b) Certain joint interests of husband and wife (1) Interests of spouse excluded from gross es- tate Notwithstanding subsection (a), in the case of any qualified joint interest, the value in- cluded in the gross estate with respect to such interest by reason of this section is one-half of the value of such qualified joint interest. (2) Qualified joint interest defined For purposes of paragraph (1), the term ‘‘qualified joint interest’’ means any interest in property held by the decedent and the dece- dent’s spouse as— (A) tenants by the entirety, or (B) joint tenants with right of survivor- ship, but only if the decedent and the spouse of the decedent are the only joint tenants. (Aug. 16, 1954, ch. 736, 68A Stat. 385; Pub. L. 87–834, § 18(a)(2)(G), Oct. 16, 1962, 76 Stat. 1052; Pub. L. 94–455, title XX, § 2002(c)(1), (3), Oct. 4, 1976, 90 Stat. 1855, 1856; Pub. L. 95–600, title V, § 511(a), title VII, § 702(k)(2), Nov. 6, 1978, 92 Stat. 2881, 2932; Pub. L. 96–222, title I, § 105(a)(3), Apr. 1, 1980, 94 Stat. 218; Pub. L. 97–34, title IV, § 403(c)(1)–(3)(A), Aug. 13, 1981, 95 Stat. 301, 302.) Editorial Notes AMENDMENTS 1981—Subsec. (a). Pub. L. 97–34, § 403(c)(2), substituted ‘‘joint tenants with right of survivorship’’ for ‘‘joint tenants’’ in three places. Subsec. (b)(2). Pub. L. 97–34, § 403(c)(1), in redefining ‘‘qualified joint interest’’ substituted provision defin- ing term as meaning any interest in property held by the decedent and the decedent’s spouse as tenants by the entirety, or joint tenants with right of survivor- ship, but only if the decedent and the spouse of the de- cedent are the only joint tenants for provision defining the term as meaning any interest in property held by the decedent and the decedent’s spouse as joint tenants or as tenants by the entirety, but only if such joint in- terest was created by the decedent, the decedent’s spouse, or both, in the case of personal property, the creation of such joint interest constituted in whole or in part a gift for purposes of chapter 12, or in the case of real property, an election under section 2515 applies with respect to the creation of such joint interest, and in the case of a joint tenancy, only the decedent and the decedent’s spouse are joint tenants. Subsecs. (c) to (e). Pub. L. 97–34, § 403(c)(3)(A), re- pealed subsec. (c) respecting value where spouse of de- cedent materially participated in farm or other busi- ness, subsec. (d) relating to joint interests of husband and wife created before 1977, and subsec. (e) covering treatment of certain post-1976 terminations. 1980—Subsec. (c)(1). Pub. L. 96–222, § 105(a)(3)(B), sub- stituted ‘‘subsection (a)’’ for ‘‘subsections (a)’’. Subsec. (c)(2)(C). Pub. L. 96–222, § 105(a)(3)(A), added subpar. (C). 1978—Subsec. (c). Pub. L. 95–600, § 511(a), added subsec. (c). Subsecs. (d), (e). Pub. L. 95–600, § 702(k)(2), added sub- secs. (d) and (e). 1976—Pub. L. 94–455 designated existing provisions as subsec. (a), added heading for subsec. (a), and added subsec. (b). 1962—Pub. L. 87–834 struck out provisions which ex- cepted real property outside of the United States. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97–34 applicable to estates of decedents dying after Dec. 31, 1981, see section 403(e) of Pub. L. 97–34, set out as a note under section 2056 of this title. EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96–222 effective, except as oth- erwise provided, as if it had been included in the provi- sions of the Revenue Act of 1978, Pub. L. 95–600, to which such amendment relates, see section 201 of Pub. L. 96–222, set out as a note under section 32 of this title. EFFECTIVE DATE OF 1978 AMENDMENT Pub. L. 95–600, title V, § 511(b), Nov. 6, 1978, 92 Stat. 2882, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall apply with re- spect to estates of decedents dying after December 31, 1978.’’ EFFECTIVE DATE OF 1976 AMENDMENT Pub. L. 94–455, title XX, § 2002(d)(3), Oct. 4, 1976, 90 Stat. 1856, provided that: ‘‘The amendment made by subsection (c) [amending this section and section 2515 of this title] shall apply to joint interests created after December 31, 1976.’’ EFFECTIVE DATE OF 1962 AMENDMENT Amendment by Pub. L. 87–834 applicable to estates of decedents dying after Oct. 16, 1962, except as otherwise provided, see section 18(b) of Pub. L. 87–834, set out as a note under section 2031 of this title. CONSIDERATION GIVEN BEFORE JULY 14, 1988 BY DECE- DENT TO NONCITIZEN SPOUSE TREATED AS ORIGINALLY BELONGING TO SPOUSE Pub. L. 101–239, title VII, § 7815(d)(16), Dec. 19, 1989, 103 Stat. 2419, as amended by Pub. L. 101–508, title XI, § 11701(l)(3), Nov. 5, 1990, 104 Stat. 1388–513, provided that: ‘‘For purposes of applying section 2040(a) of the Internal Revenue Code of 1986 with respect to any joint interest to which section 2040(b) of such Code does not apply solely by reason of section 2056(d)(1)(B) of such Code, any consideration furnished before July 14, 1988, by the decedent for such interest to the extent treated as a gift to the spouse of the decedent for purposes of chapter 12 of such Code (or would have been so treated if the donor were a citizen of the United States) shall be treated as consideration originally belonging to such spouse and never acquired by such spouse from the decedent.’’ § 2041. Powers of appointment (a) In general The value of the gross estate shall include the value of all property— (1) Powers of appointment created on or before October 21, 1942 To the extent of any property with respect to which a general power of appointment cre- ated on or before October 21, 1942, is exercised by the decedent— (A) by will, or (B) by a disposition which is of such nature that if it were a transfer of property owned by the decedent, such property would be in- cludible in the decedent’s gross estate under sections 2035 to 2038, inclusive; but the failure to exercise such a power or the complete release of such a power shall not be