26 U.S.C. § 2505 — Unified credit against gift tax

Page 2638 TITLE 26—INTERNAL REVENUE CODE § 2505 Subsec. (b). Pub. L. 97–34, § 442(a)(4)(B), substituted in heading ‘‘calendar periods’’ for ‘‘years and quarters’’ and in text ‘‘preceding calendar periods’’ for ‘‘preceding calendar years and calendar quarters’’, ‘‘the periods’’ for ‘‘the years and calendar quarters’’, and ‘‘such pre- ceding calendar periods’’ for ‘‘such years and calendar quarters’’. Subsec. (c). Pub. L. 97–34, § 442(a)(4)(C), substituted in heading ‘‘calendar periods’’ for ‘‘calendar years and quarters’’ and in text ‘‘preceding calendar period’’ for ‘‘preceding calendar year or calendar quarter’’ in four places, ‘‘any calendar year’’ for ‘‘any calendar quar- ter’’, and ‘‘section 2502(b)’’ for ‘‘section 2502(c)’’. 1976—Subsec. (a). Pub. L. 94–455 inserted ‘‘(as in effect before its repeal by the Tax Reform Act of 1976)’’ after ‘‘section 2521’’ and ‘‘ending before January 1, 1977’’ after ‘‘years or calendar quarters’’ and substituted ‘‘of’’ for ‘‘to previous’’ after ‘‘computations in respect’’. 1970—Pub. L. 91–614 substituted ‘‘Taxable gifts for preceding years and quarters’’ for ‘‘Taxable gifts for preceding years’’ in section catchline. Subsec. (a). Pub. L. 91–614 substituted ‘‘In computing taxable gifts for the preceding calendar years or cal- endar quarters for the purpose of computing the tax for any calendar quarter,’’ for ‘‘In computing taxable gifts for the calendar year 1954 and preceding calendar years for the purpose of computing the tax for the calendar year 1955 or any calendar year thereafter,’’ provided that the laws applicable in the calendar quarters as well as the years in which the transfers in question were made shall apply, and substituted ‘‘previous cal- endar years or calendar quarters for the purpose of computing the tax for any calendar year or calendar quarter’’ for ‘‘the calendar year 1954 and previous cal- endar years for the purpose of computing the tax for the calendar year 1955 or any calendar year thereafter’’. Subsec. (b). Pub. L. 91–614 inserted reference to cal- endar quarters in heading, substituted ‘‘during pre- ceding calendar years and calendar quarters,’’ for ‘‘dur- ing the calendar year 1954 and preceding calendar years,’’ made reference to the amount excluded by gift tax laws applicable to the calendar quarters as well as years in which the gifts were made, and substituted ‘‘during such years and calendar quarters’’ for ‘‘during such year’’. Subsec. (c). Pub. L. 91–614 inserted reference to cal- endar quarters in heading, inserted ‘‘or calendar quar- ter’’ after ‘‘calendar year’’ in four places, and sub- stituted ‘‘for any calendar quarter,’’ for ‘‘for the cal- endar year 1955 and subsequent calendar years,’’. Subsec. (d). Pub. L. 91–614 struck out ‘‘For years be- fore the calendar year 1955’’ from explanation of term ‘‘net gifts’’ as used in corresponding provisions of prior laws. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1998 AMENDMENT Amendment by Pub. L. 105–206 effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 6024 of Pub. L. 105–206, set out as a note under section 1 of this title. EFFECTIVE DATE OF 1997 AMENDMENT Amendment by Pub. L. 105–34 applicable to gifts made after Aug. 5, 1997, see section 506(e)(1) of Pub. L. 105–34, as amended, set out as a note under section 2001 of this title. EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97–34 applicable with respect to gifts made after Dec. 31, 1981, see section 442(e) of Pub. L. 97–34, set out as a note under section 2501 of this title. EFFECTIVE DATE OF 1970 AMENDMENT Amendment by Pub. L. 91–614 applicable with respect to gifts made after Dec. 31, 1970, see section 102(e) of Pub. L. 91–614, set out as a note under section 2501 of this title. § 2505. Unified credit against gift tax (a) General rule In the case of a citizen or resident of the United States, there shall be allowed as a credit against the tax imposed by section 2501 for each calendar year an amount equal to— (1) the applicable credit amount in effect under section 2010(c) which would apply if the donor died as of the end of the calendar year, reduced by (2) the sum of the amounts allowable as a credit to the individual under this section for all preceding calendar periods. For purposes of applying paragraph (2) for any calendar year, the rates of tax in effect under section 2502(a)(2) for such calendar year shall, in lieu of the rates of tax in effect for preceding calendar periods, be used in determining the amounts allowable as a credit under this section for all preceding calendar periods. (b) Adjustment to credit for certain gifts made before 1977 The amount allowable under subsection (a) shall be reduced by an amount equal to 20 per- cent of the aggregate amount allowed as a spe- cific exemption under section 2521 (as in effect before its repeal by the Tax Reform Act of 1976) with respect to gifts made by the individual after September 8, 1976. (c) Limitation based on amount of tax The amount of the credit allowed under sub- section (a) for any calendar year shall not ex- ceed the amount of the tax imposed by section 2501 for such calendar year. (Added Pub. L. 94–455, title XX, § 2001(b)(2), Oct. 4, 1976, 90 Stat. 1849; amended Pub. L. 97–34, title IV, §§ 401(b), 442(a)(5), Aug. 13, 1981, 95 Stat. 299, 321; Pub. L. 101–508, title XI, § 11801(a)(40), (c)(19)(B), Nov. 5, 1990, 104 Stat. 1388–521, 1388–528; Pub. L. 105–34, title V, § 501(a)(2), Aug. 5, 1997, 111 Stat. 845; Pub. L. 107–16, title V, § 521(b), June 7, 2001, 115 Stat. 71; Pub. L. 111–312, title III, §§ 301(b), 302(b)(1)(A), (d)(2), 303(b)(1), Dec. 17, 2010, 124 Stat. 3300–3303.) Editorial Notes REFERENCES IN TEXT The Tax Reform Act of 1976, referred to in subsec. (b), is Pub. L. 94–455, Oct. 4, 1976, 90 Stat. 1520. Section 2521 of this title was repealed by section 2001(b)(3) of Pub. L. 94–455. For complete classification of this Act to the Code, see Tables. AMENDMENTS 2010—Subsec. (a). Pub. L. 111–312, § 302(d)(2), inserted concluding provisions. Subsec. (a)(1). Pub. L. 111–312, § 303(b)(1), amended par. (1) generally. Prior to amendment, par. (1) read as fol- lows: ‘‘the applicable credit amount in effect under sec- tion 2010(c) for such calendar year, reduced by’’. Pub. L. 111–312, § 302(b)(1)(A), struck out ‘‘(determined as if the applicable exclusion amount were $1,000,000)’’ after ‘‘calendar year’’. Pub. L. 111–312, § 301(b), amended subsec. (a)(1) to read as if amendment by Pub. L. 107–16, § 521(b)(2), had never been enacted. See 2001 Amendment note below. Page 2639 TITLE 26—INTERNAL REVENUE CODE § 2511 2001—Subsec. (a)(1). Pub. L. 107–16, § 521(b)(2), amend- ed par. (1) generally. Prior to amendment, par. (1) read as follows: ‘‘the applicable credit amount in effect under section 2010(c) for such calendar year (deter- mined as if the applicable exclusion amount were $1,000,000), reduced by’’. Pub. L. 107–16, § 521(b)(1), inserted ‘‘(determined as if the applicable exclusion amount were $1,000,000)’’ after ‘‘calendar year’’. 1997—Subsec. (a)(1). Pub. L. 105–34 substituted ‘‘the applicable credit amount in effect under section 2010(c) for such calendar year’’ for ‘‘$192,800’’. 1990—Subsecs. (b) to (d). Pub. L. 101–508 redesignated subsecs. (c) and (d) as subsecs. (b) and (c), respectively, and struck out former subsec. (b) which provided for a phase-in of the unified credit against gift tax. 1981—Subsec. (a). Pub. L. 97–34, § 442(a)(5)(A), sub- stituted in provision preceding par. (1) ‘‘year’’ for ‘‘quarter’’, and ‘‘periods’’ for ‘‘quarters’’ in par. (2). Subsec. (a)(1). Pub. L. 97–34, § 401(b)(1), substituted ‘‘$192,800’’ for ‘‘$47,000’’. Subsec. (b). Pub. L. 97–34, § 401(b)(2), struck out from heading ‘‘$47,000’’ before ‘‘credit’’, substituted subsec. (a)(1) substitutions for ‘‘$192,800’’ of amounts of ‘‘$62,800’’, ‘‘$79,300’’, ‘‘$96,300’’, ‘‘$121,800’’, and ‘‘$155,800’’ in the case of gifts made in 1982, 1983, 1984, 1985, and 1986, respectively, for subsec. (a)(1) substitutions for ‘‘$47,000’’ of amounts of ‘‘$6,000’’, ‘‘$30,000’’, ‘‘$34,000’’, ‘‘$38,000’’, and ‘‘$42,500’’ in the case of gifts made after Dec. 31, 1976, and before July 1, 1977, after June 30, 1977, and before Jan. 1, 1978; after Dec. 31, 1977, and before Jan. 1, 1979, after Dec. 31, 1978, and before Jan. 1, 1980, and after Dec. 31, 1979, and before Jan. 1, 1981, respec- tively. Subsec. (d). Pub. L. 97–34, § 442(a)(5)(B), substituted ‘‘year’’ for ‘‘quarter’’ in two places. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Pub. L. 111–312, title III, § 301(b), Dec. 17, 2010, 124 Stat. 3300, provided that the amendment by section 301(b) is effective on and after Jan. 1, 2011. Pub. L. 111–312, title III, § 302(b)(1)(B), Dec. 17, 2010, 124 Stat. 3301, provided that: ‘‘The amendment made by this paragraph [amending this section] shall apply to gifts made after December 31, 2010.’’ Amendment by section 302(d)(2) of Pub. L. 111–312 ap- plicable to estates of decedents dying, generation-skip- ping transfers, and gifts made, after Dec. 31, 2009, see section 302(f) of Pub. L. 111–312, set out as a note under section 2001 of this title. Amendment by section 303(b)(1) of Pub. L. 111–312 ap- plicable to estates of decedents dying and gifts made after Dec. 31, 2010, see section 303(c)(1) of Pub. L. 111–312, set out as a note under section 2010 of this title. EFFECTIVE DATE OF 2001 AMENDMENT Amendment by section 521(b)(1) of Pub. L. 107–16 ap- plicable to estates of decedents dying, and gifts made, after Dec. 31, 2001, and amendment by section 521(b)(2) of Pub. L. 107–16 applicable to gifts made after Dec. 31, 2009, see section 521(e)(1), (2) of Pub. L. 107–16, set out as a note under section 2010 of this title. EFFECTIVE DATE OF 1997 AMENDMENT Amendment by Pub. L. 105–34 applicable to estates of decedents dying, and gifts made, after Dec. 31, 1997, see section 501(f) of Pub. L. 105–34, set out as a note under section 2001 of this title. EFFECTIVE DATE OF 1981 AMENDMENT Pub. L. 97–34, title IV, § 401(c)(2), Aug. 13, 1981, 95 Stat. 300, provided that: ‘‘The amendments made by sub- section (b) [amending this section] shall apply to gifts made after such date [Dec. 31, 1981].’’ Amendment by section 442(a)(5) of Pub. L. 97–34 appli- cable with respect to gifts made after Dec. 31, 1981, see section 442(e) of Pub. L. 97–34, set out as a note under section 2501 of this title. SAVINGS PROVISION For provisions that nothing in amendment by Pub. L. 101–508 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Nov. 5, 1990, for purposes of determining liabil- ity for tax for periods ending after Nov. 5, 1990, see sec- tion 11821(b) of Pub. L. 101–508, set out as a note under section 45K of this title. Subchapter B—Transfers Sec. 2511. Transfers in general. 2512. Valuation of gifts. 2513. Gift by husband or wife to third party. 2514. Powers of appointment. 2515. Treatment of generation-skipping transfer tax. [2515A. Repealed.] 2516. Certain property settlements. [2517. Repealed.] 2518. Disclaimers. 2519. Dispositions of certain life estates. Editorial Notes AMENDMENTS 1986—Pub. L. 99–514, title XIV, § 1432(d)(2), title XVIII, § 1852(e)(2)(B), Oct. 22, 1986, 100 Stat. 2730, 2868, added item 2515 and struck out item 2517 ‘‘Certain annuities under qualified plans’’. 1981—Pub. L. 97–34, title IV, § 403(c)(3)(C), (d)(3)(B)(ii), Aug. 13, 1981, 95 Stat. 302, 304, as amended Pub. L. 97–448, title I, § 104(a)(3)(B), Jan. 12, 1983, 96 Stat. 2380, struck out items 2515 ‘‘Tenancies by the entirety in real property’’ and 2515A ‘‘Tenancies by the entirety in personal property’’ and added item 2519. 1978—Pub. L. 95–600, title VII, § 702(k)(1)(C), Nov. 6, 1978, 92 Stat. 2932, substituted in item 2515 ‘‘Tenancies by the entirety in real property’’ for ‘‘Tenancies by the entirety’’ and added item 2515A. 1976—Pub. L. 94–455, title XX, § 2009(b)(3)(A), Oct. 4, 1976, 90 Stat. 1894, added item 2518. 1958—Pub. L. 85–866, title I, § 68(b), Sept. 2, 1958, 72 Stat. 1659, added item 2517. § 2511. Transfers in general (a) Scope Subject to the limitations contained in this chapter, the tax imposed by section 2501 shall apply whether the transfer is in trust or other- wise, whether the gift is direct or indirect, and whether the property is real or personal, tan- gible or intangible; but in the case of a non- resident not a citizen of the United States, shall apply to a transfer only if the property is situ- ated within the United States. (b) Intangible property For purposes of this chapter, in the case of a nonresident not a citizen of the United States who is excepted from the application of section 2501(a)(2)— (1) shares of stock issued by a domestic cor- poration, and (2) debt obligations of— (A) a United States person, or (B) the United States, a State or any polit- ical subdivision thereof, or the District of Columbia, which are owned and held by such nonresident shall be deemed to be property situated within the United States. (Aug. 16, 1954, ch. 736, 68A Stat. 406; Pub. L. 89–809, title I, § 109(b), Nov. 13, 1966, 80 Stat. 1575;