26 U.S.C. § 2502 — Rate of tax

Page 2634 TITLE 26—INTERNAL REVENUE CODE § 2502 (d) [amending this section] shall apply with respect to gifts made after the date of the enactment of this Act [Sept. 14, 1960].’’ EFFECTIVE DATE OF 1958 AMENDMENT Amendment by Pub. L. 85–866 applicable to gifts made after September 2, 1958, see section 102(d) of Pub. L. 85–866, set out as a note under section 2014 of this title. CONSTRUCTION OF 2015 AMENDMENT Pub. L. 114–113, div. Q, title IV, § 408(c), Dec. 18, 2015, 129 Stat. 3121, provided that: ‘‘Nothing in the amend- ment made by subsection (a) [amending this section] shall be construed to create any inference with respect to whether any transfer of property (whether made be- fore, on, or after the date of the enactment of this Act [Dec. 18, 2015]) to an organization described in para- graph (4), (5), or (6) of section 501(c) of the Internal Rev- enue Code of 1986 is a transfer of property by gift for purposes of chapter 12 of such Code.’’ ELECTION TO HAVE AMENDMENTS BY TITLE IV OF THE ECONOMIC RECOVERY TAX ACT OF 1981 NOT APPLY Pub. L. 97–448, title I, § 104(d)(3), Jan. 12, 1983, 96 Stat. 2383, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘(A) In the case of any decedent— ‘‘(i) who dies before August 13, 1984, and ‘‘(ii) who made a gift (before August 13, 1981, and during the 3-year period ending on the date of the de- cedent’s death) on which tax imposed by chapter 12 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] has been paid before April 16, 1982, such decedent’s executor may make an election to have subtitle B of such Code (relating to estate and gift taxes) applied with respect to such decedent without regard to any of the amendments made by title IV of the Economic Recovery Tax Act of 1981 [Pub. L. 97–34, title IV]. ‘‘(B) An election under subparagraph (A) shall be made at such time and in such manner as the Secretary of the Treasury or his delegate shall prescribe. ‘‘(C) An election under subparagraph (A), once made, shall be irrevocable.’’ § 2502. Rate of tax (a) Computation of tax The tax imposed by section 2501 for each cal- endar year shall be an amount equal to the ex- cess of— (1) a tentative tax, computed under section 2001(c), on the aggregate sum of the taxable gifts for such calendar year and for each of the preceding calendar periods, over (2) a tentative tax, computed under such sec- tion, on the aggregate sum of the taxable gifts for each of the preceding calendar periods. (b) Preceding calendar period Whenever used in this title in connection with the gift tax imposed by this chapter, the term ‘‘preceding calendar period’’ means— (1) calendar years 1932 and 1970 and all cal- endar 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), the term ‘‘cal- endar 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. (Aug. 16, 1954, ch. 736, 68A Stat. 403; Pub. L. 91–614, title I, § 102(a)(2), Dec. 31, 1970, 84 Stat. 1839; Pub. L. 94–455, title XX, § 2001(b)(1), Oct. 4, 1976, 90 Stat. 1849; Pub. L. 97–34, title IV, § 442(a)(2), Aug. 13, 1981, 95 Stat. 320; Pub. L. 100–203, title X, § 10401(b)(2)(B), Dec. 22, 1987, 101 Stat. 1330–431; Pub. L. 107–16, title V, § 511(d), June 7, 2001, 115 Stat. 70; Pub. L. 111–312, title III, § 302(b)(2), Dec. 17, 2010, 124 Stat. 3301.) Editorial Notes AMENDMENTS 2010—Subsec. (a). Pub. L. 111–312 amended subsec. (a) to read as if amendment by Pub. L. 107–16, § 511(d), had never been enacted. See 2001 Amendment note below. 2001—Subsec. (a). Pub. L. 107–16, § 511(d), amended sub- sec. (a) generally. Prior to amendment, text read as fol- lows: ‘‘The tax imposed by section 2501 for each cal- endar year shall be an amount equal to the excess of— ‘‘(1) a tentative tax, computed under section 2001(c), on the aggregate sum of the taxable gifts for such calendar year and for each of the preceding calendar periods, over ‘‘(2) a tentative tax, computed under such section, on the aggregate sum of the taxable gifts for each of the preceding calendar periods.’’ 1987—Subsec. (a)(1). Pub. L. 100–203, § 10401(b)(2)(B)(i), substituted ‘‘under section 2001(c)’’ for ‘‘in accordance with the rate schedule set forth in section 2001(c)’’. Subsec. (a)(2). Pub. L. 100–203, § 10401(b)(2)(B)(ii), sub- stituted ‘‘under such section’’ for ‘‘in accordance with such rate schedule’’. 1981—Subsec. (a). Pub. L. 97–34 substituted in intro- ductory text and par. (1) ‘‘calendar year’’ for ‘‘calendar quarter’’ and in pars. (1) and (2) ‘‘calendar periods’’ for ‘‘calendar years and calendar quarters’’. Subsec. (b). Pub. L. 97–34 substituted definition of ‘‘preceding calendar period’’ for ‘‘calendar quarter’’, the latter including only the first calendar quarter of the calendar year 1971 and succeeding calendar quarters (covered in par. (2)), the former incorporating former subsec. (c)(1) definition of ‘‘preceding calendar years’’ as meaning calendar years 1932 and 1970 and all cal- endar years intervening between calendar year 1932 and calendar year 1970 and ‘‘calendar year 1932’’ as includ- ing only the portion of such year after June 6, 1932, and former subsec. (c)(2) definition of ‘‘preceding calendar quarters’’ as meaning the first calendar quarter of cal- endar year 1971 and all calendar quarters intervening between such calendar quarter and the calendar quar- ter for which the tax is being computed. Subsecs. (c), (d). Pub. L. 97–34 redesignated subsec. (d) as (c). Former subsec. (c), defining ‘‘preceding calendar years’’ and ‘‘preceding calendar quarters’’, was incor- porated in subsec. (b). 1976—Subsec. (a). Pub. L. 94–455 inserted ‘‘tentative’’ after ‘‘(1) a’’ and ‘‘(2) a’’ and substituted in par. (1) ‘‘section 2001(c)’’ for ‘‘this subsection’’ after ‘‘set forth in’’. 1970—Subsec. (a). Pub. L. 91–614, § 102(a)(2)(A), sub- stituted a computation of tax formula based on the cur- rent calendar quarter, preceding calendar quarters, and preceding calendar years for a formula based entirely on the current and preceding calendar years. Subsec. (b). Pub. L. 91–614, § 102(a)(2)(B), substituted definition of ‘‘calendar quarter’’ for definition of ‘‘cal- endar year’’. Subsec. (c). Pub. L. 91–614, § 102(a)(2)(B), substituted definition of ‘‘preceding calendar years and quarters’’ for definition of ‘‘preceding calendar years’’. Page 2635 TITLE 26—INTERNAL REVENUE CODE § 2503 Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Pub. L. 111–312, title III, § 302(b)(2), Dec. 17, 2010, 124 Stat. 3301, provided that the amendment by section 302(b)(2) is effective on and after Jan. 1, 2011. EFFECTIVE DATE OF 2001 AMENDMENT Pub. L. 107–16, title V, § 511(f)(3), June 7, 2001, 115 Stat. 71, provided that: ‘‘The amendments made by sub- sections (d) and (e) [amending this section and section 2511 of this title] shall apply to gifts made after Decem- ber 31, 2009.’’ EFFECTIVE DATE OF 1987 AMENDMENT Amendment by Pub. L. 100–203 applicable in the case of decedents dying, and gifts made, after Dec. 31, 1987, see section 10401(c) of Pub. L. 100–203, 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 1976 AMENDMENT Pub. L. 94–455, title XX, § 2001(d)(2), Oct. 4, 1976, 90 Stat. 1854, provided that: ‘‘The amendments made by subsections (b) and (c)(2) [enacting section 2505 of this title, amending this section and section 2504 of this title, and repealing section 2521 of this title] shall apply to gifts made after December 31, 1976.’’ 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. § 2503. Taxable gifts (a) General definition 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. Where there has been a transfer to any person of a present interest in property, the possibility that such interest may be dimin- ished by the exercise of a power shall be dis- regarded in applying this subsection, if no part of such interest will at any time pass to any other person. (2) Inflation adjustment In the case of gifts made in a calendar year after 1998, the $10,000 amount contained in paragraph (1) shall be increased by an amount equal to— (A) $10,000, multiplied by (B) the cost-of-living adjustment deter- mined under section 1(f)(3) for such calendar year by substituting ‘‘calendar year 1997’’ for ‘‘calendar year 2016’’ in subparagraph (A)(ii) thereof. If any amount as adjusted under the preceding sentence is not a multiple of $1,000, such amount shall be rounded to the next lowest multiple of $1,000. (c) Transfer for the benefit of minor No part of a gift to an individual who has not attained the age of 21 years on the date of such transfer shall be considered a gift of a future in- terest in property for purposes of subsection (b) if the property and the income therefrom— (1) may be expended by, or for the benefit of, the donee before his attaining the age of 21 years, and (2) will to the extent not so expended— (A) pass to the donee on his attaining the age of 21 years, and (B) in the event the donee dies before at- taining the age of 21 years, be payable to the estate of the donee or as he may appoint under a general power of appointment as de- fined in section 2514(c). [(d) Repealed. Pub. L. 97–34, title III, § 311(h)(5), Aug. 13, 1981, 95 Stat. 282] (e) Exclusion for certain transfers for edu- cational expenses or medical expenses (1) In general Any qualified transfer shall not be treated as a transfer of property by gift for purposes of this chapter. (2) Qualified transfer For purposes of this subsection, the term ‘‘qualified transfer’’ means any amount paid on behalf of an individual— (A) as tuition to an educational organiza- tion 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 re- spect 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 prop- erty by gift for purposes of this chapter. (g) Treatment of certain loans of artworks (1) In general For purposes of this subtitle, any loan of a qualified work of art shall not be treated as a transfer (and the value of such qualified work of art shall be determined as if such loan had not been made) if— (A) such loan is to an organization de- scribed in section 501(c)(3) and exempt from tax under section 501(c) (other than a private foundation), and (B) the use of such work by such organiza- tion is related to the purpose or function constituting the basis for its exemption under section 501. (2) Definitions For purposes of this section— (A) Qualified work of art The term ‘‘qualified work of art’’ means any archaeological, historic, or creative tan- gible personal property.