Solely for purposes of determining whether a transfer of an interest in trust to (or for the benefit of) a member of the transferor's family is a gift (and the value of such transfer), the value of any interest in such trust retained by the transferor or any applicable family member (as defined in section 2701(e)(2)) shall be determined as provided in paragraph (2).
The value of any retained interest which is not a qualified interest shall be treated as being zero.
The value of any retained interest which is a qualified interest shall be determined under section 7520.
This subsection shall not apply to any transfer-
For purposes of subparagraph (A), the term "incomplete gift" means any transfer which would not be treated as a gift whether or not consideration was received for such transfer.
For purposes of this section, the term "qualified interest" means-
For purposes of this section-
The transfer of an interest in property with respect to which there is 1 or more term interests shall be treated as a transfer of an interest in a trust.
If 2 or more members of the same family acquire interests in any property described in paragraph (1) in the same transaction (or a series of related transactions), the person (or persons) acquiring the term interests in such property shall be treated as having acquired the entire property and then transferred to the other persons the interests acquired by such other persons in the transaction (or series of transactions). Such transfer shall be treated as made in exchange for the consideration (if any) provided by such other persons for the acquisition of their interests in such property.
The term "term interest" means-
If the nonexercise of rights under a term interest in tangible property would not have a substantial effect on the valuation of the remainder interest in such property-
In the case of a transfer of an income or remainder interest with respect to a specified portion of the property in a trust, only such portion shall be taken into account in applying this section to such transfer.
For purposes of this section, the term "member of the family" shall have the meaning given such term by section 2704(c)(2).
26 U.S.C. § 2702
AMENDMENTS1996-Subsec. (a)(3)(A)(i). Pub. L. 104-188, §1702(f)(11)(A)(i), (ii), (B) (i), substituted "if" for "to the extent" and "incomplete gift" for "incomplete transfer", and struck out "or" at end. Subsec. (a)(3)(A)(ii). Pub. L. 104-188, §1702(f)(11)(A)(iii), substituted ", or" for period at end.Subsec. (a)(3)(A)(iii). Pub. L. 104-188, §1702(f)(11)(A)(iv), added cl. (iii).Subsec. (a)(3)(B). Pub. L. 104-188, §1702(f)(11)(B), substituted "incomplete gift" for "incomplete transfer" in heading and text.
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 provision of the Revenue Reconciliation Act of 1990, Pub. L. 101-508 to which such amendment relates, see section 1702(i) of Pub. L. 104-188 set out as a note under sectionof this title.
- The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
- The term "transaction" includes a series of transactions.