Title 26 — Internal Revenue Code
Part II · Chapter 1 — Normal Taxes and Surtaxes
§ 1015. Basis of property acquired by gifts and transfers in trust
Statutory text
Gifts after
If the property was acquired by gift after , the basis shall be the same as it would be in the hands of the donor or the last preceding owner by whom it was not acquired by gift, except that if such basis (adjusted for the period before the date of the gift as provided in section 1016) is greater than the fair market value of the property at the time of the gift, then for the purpose of determining loss the basis shall be such fair market value. If the facts necessary to determine the basis in the hands of the donor or the last preceding owner are unknown to the donee, the Secretary shall, if possible, obtain such facts from such donor or last preceding owner, or any other person cognizant thereof. If the Secretary finds it impossible to obtain such facts, the basis in the hands of such donor or last preceding owner shall be the fair market value of such property as found by the Secretary as of the date or approximate date at which, according to the best information that the Secretary is able to obtain, such property was acquired by such donor or last preceding owner.
Transfer in trust after
If the property was acquired after , by a transfer in trust (other than by a transfer in trust by a gift, bequest, or devise), the basis shall be the same as it would be in the hands of the grantor increased in the amount of gain or decreased in the amount of loss recognized to the grantor on such transfer under the law applicable to the year in which the transfer was made.
Gift or transfer in trust before
If the property was acquired by gift or transfer in trust on or before , the basis shall be the fair market value of such property at the time of such acquisition.
Increased basis for gift tax paid
In general
If—
the property is acquired by gift on or after , the basis shall be the basis determined under subsection (a), increased (but not above the fair market value of the property at the time of the gift) by the amount of gift tax paid with respect to such gift, or
the property was acquired by gift before , and has not been sold, exchanged, or otherwise disposed of before such date, the basis of the property shall be increased on such date by the amount of gift tax paid with respect to such gift, but such increase shall not exceed an amount equal to the amount by which the fair market value of the property at the time of the gift exceeded the basis of the property in the hands of the donor at the time of the gift.
Amount of tax paid with respect to gift
For purposes of paragraph (1), the amount of gift tax paid with respect to any gift is an amount which bears the same ratio to the amount of gift tax paid under chapter 12 with respect to all gifts made by the donor for the calendar year (or preceding calendar period) in which such gift is made as the amount of such gift bears to the taxable gifts (as defined in section 2503(a) but computed without the deduction allowed by section 2521) made by the donor during such calendar year or period. For purposes of the preceding sentence, the amount of any gift shall be the amount included with respect to such gift in determining (for the purposes of section 2503(a)) the total amount of gifts made during the calendar year or period, reduced by the amount of any deduction allowed with respect to such gift under section 2522 (relating to charitable deduction) or under section 2523 (relating to marital deduction).
Gifts treated as made one-half by each spouse
For purposes of paragraph (1), where the donor and his spouse elected, under section 2513 to have the gift considered as made one-half by each, the amount of gift tax paid with respect to such gift under chapter 12 shall be the sum of the amounts of tax paid with respect to each half of such gift (computed in the manner provided in paragraph (2)).
Treatment as adjustment to basis
For purposes of section 1016(b), an increase in basis under paragraph (1) shall be treated as an adjustment under section 1016(a).
Application to gifts before 1955
With respect to any property acquired by gift before 1955, references in this subsection to any provision of this title shall be deemed to refer to the corresponding provision of the Internal Revenue Code of 1939 or prior revenue laws which was effective for the year in which such gift was made.
Special rule for gifts made after
In general
In the case of any gift made after , the increase in basis provided by this subsection with respect to any gift for the gift tax paid under chapter 12 shall be an amount (not in excess of the amount of tax so paid) which bears the same ratio to the amount of tax so paid as—
the net appreciation in value of the gift, bears to
the amount of the gift.
Net appreciation
For purposes of paragraph (1), the net appreciation in value of any gift is the amount by which the fair market value of the gift exceeds the donor’s adjusted basis immediately before the gift.
Gifts between spouses
In the case of any property acquired by gift in a transfer described in section 1041(a), the basis of such property in the hands of the transferee shall be determined under section 1041(b)(2) and not this section.
Legislative history
Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.
Aug. 16, 1954, ch. 736, 68A Stat. 298 · 68A Stat. 298
Enacted · 26 U.S.C. § 1015
Aug. 16, 1954, ch. 736, 68A Stat. 298
Source evidence
Code source credit
Aug. 16, 1954, ch. 736, 68A Stat. 298Technical Amendments Act of 1958
Pub. L. 85–866 title I § 43(a) · 72 Stat. 1606
Added · 26 U.S.C. § 1015(d)
Pub. L. 85–866 added subsec. (d)
Source evidence
Code amendment note
Subsec. (d). Pub. L. 85–866 added subsec. (d).Enacted provision · exact public law section
(a) Increase for Gift Tax Paid.— Section 1015 (relating to basis of property acquired by gifts and transfers in trust) is amended by adding at the end thereof the following new subsection: “(d) Increased Basis for Gift Tax Paid.— “(1) In general.— If— “(A) the property is acquired by gift on or after the date of the enactment of the Technical Amendments Act of 1958, the basis shall be the basis determined under subsection (a), increased (but not above the fair market value of the property at the time of the gift) by the amount of gift tax paid with respect to such gift, or “(B) the property was acquired by gift before the date of the enactment of the Technical Amendments Act of 1958 and has not been sold, exchanged, or otherwise disposed of before such date, the basis of the property shall be increased on such date by the amount of gift tax paid with respect to such gift, but such increase shall not exceed an amount equal to the amount by which the fair market value of the property at the time of the gift exceeded the basis of the property in the hands of the donor at the time of the gift. “(2) Amount of tax paid with respect to gift.— For purposes of paragraph (1), the amount of gift tax paid with respect to any gift is an amount which bears the same ratio to the amount of gift tax paid under chapter 12 with respect to all gifts made by the donor for the calendar year in which such gift is made as the amount of such gift bears to the taxable gifts (as defined in 26 USC 2503, 2521. section 2503 (a) but computed without the deduction allowed by section 2521) made by the donor during such calendar year. For purposes of the preceding sentence, the amount of any gift shall be the amount included with respect to such gift in determining (for the purposes of section 2503 (a)) the total amount of gifts made during the calendar year, reduced by the amount of any deduction allowed with respect to such gift under section 2522 (relating to charitable deduction) or under section 2523 (relating 26 USC 2522, 2523. to marital deduction). “(3) Gifts treated as made one-half by each spouse.— For purposes of paragraph (1), where the donor and his spouse elected, 26 USC 2513. under section 2513 to have the gift considered as made one-half by each, the amount of gift tax paid with respect to such gift under chapter 12 shall be the sum of the amounts of tax paid with respect to each half of such gift (computed in the manner provided in paragraph (2)). “(4) Treatment as adjustment to basis.— For purposes of section 1016 (b), an increase in basis under paragraph (1) shall 26 USC 1016. be treated as an adjustment under section 1016 (a). “(5) Application to gifts before less.— With respect to any property acquired by gift before 1955, references in this subsection to any provision of this title shall be deemed to refer to the corresponding provision of the Internal Revenue Code of 1939 or prior revenue laws which was effective for the year in which such gift was made.”Excise, Estate, and Gift Tax Adjustment Act of 1970
Pub. L. 91–614 title I § 102(d)(1) · 84 Stat. 1836
Substituted · 26 U.S.C. § 1015(d)(2)
Pub. L. 91–614 substituted “calendar quarter (or calendar year if the gift was made before January 1, 1971)” for “calendar year” every other place it appears
Substituted · 26 U.S.C. § 1015(d)(2)
Pub. L. 91–614 substituted “calendar quarter or year” for “calendar year” every other place it appears
Source evidence
Code amendment note
Subsec. (d)(2). Pub. L. 91–614 substituted “calendar quarter (or calendar year if the gift was made before January 1, 1971)” for “calendar year” the first place it appears and “calendar quarter or year” for “calendar year” every other place it appears.Enacted provision · exact public law section
(1) Paragraph (2) of subsection (d) of section 1015 (relating 72 Stat. 1640. to increased basis for gift tax paid) is amended— (A) by striking out “calendar year” the first place it appears therein and inserting in lieu thereof “calendar quarter (or calendar year if the gift was made before January 1, 1971)”, and (B) by striking out “calendar year” every other place it appears therein and inserting in lieu thereof “calendar quarter or year”.Pub. L. 94–455 § 1906(b)(13)(A) · 90 Stat. 1520
Struck · 26 U.S.C. § 1015(a)
Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary” in four places
Source evidence
Code amendment note
Subsec. (a). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary” in four places.Enacted provision · exact public law section
(A) The Internal Revenue Code of 1954, as amended by this Act, is amended by striking out “Secretary or his delegate” each place it appears and inserting in lieu thereof “Secretary”.Pub. L. 94–455 § 1901(a)(122) · 90 Stat. 1520
Substituted · 26 U.S.C. § 1015(d)(1)(A); 26 U.S.C. § 1015(d)(1)(B)
Pub. L. 94–455, § 1901(a)(122), substituted “September 2, 1958” for “the date of enactment of the Technical Amendments Act of 1958”
Source evidence
Code amendment note
Subsec. (d)(1)(A), (B). Pub. L. 94–455, § 1901(a)(122), substituted “September 2, 1958” for “the date of enactment of the Technical Amendments Act of 1958”.Enacted provision · exact public law section
(122) Amendments of section 1015.— (A) Subparagraph (A) of section 1015(d)(1) (relating to increased ‘basis for gift tax paid) is amended by striking out “the date of the enactment of the Technical Amendments Act of 1958” and inserting in lieu thereof “September 2, 1958”. (B) Subparagraph (B) of section 1015(d)(1) is amended by striking out “the date of the enactment of the Technical Amendments Act of 1958” and inserting in lieu thereof “September 2, 1958,”.Pub. L. 94–455 § 2005(c) · 90 Stat. 1520
Added · 26 U.S.C. § 1015(d)(6)
Pub. L. 94–455, § 2005(c), added par. (6)
Source evidence
Code amendment note
Subsec. (d)(6). Pub. L. 94–455, § 2005(c), added par. (6).Enacted provision · exact public law section
(c) Limitation of Increase in Basis for Gift Tax Paid to That Portion of Gift Tax Attributable to Net Appreciation in Value.— Subsection (d) of section 1015 (relating to increased basis for gift tax 26 USC 1015. paid) is amended by adding at the end thereof the following new paragraph: “(6) Special rule for gifts made after December 31, 1976.— (A) In general.— In the case of any gift made after December 31, 1976, the increase in basis provided by this subsection with respect to any gift for the gift tax paid under chapter 12 shall be an amount (not in excess of the amount of tax so paid) which bears the same ratio to the amount of tax so paid as— “(i) the net appreciation in value of the gift, bears to “(ii) the amount of the gift. “(B) Net appreciation.— For purposes of paragraph (1), the net appreciation in value of any gift is the amount by which the fair market value of the gift exceeds the donor’s adjusted basis immediately before the gift,”Economic Recovery Tax Act of 1981
Pub. L. 97–34 title IV § 442(d)(1) · 95 Stat. 175
Substituted · 26 U.S.C. § 1015(d)(2)
Pub. L. 97–34 substituted “calendar year (or preceding calendar period)” for “calendar quarter (or calendar year if the gift was made before January 1, 1971)” in two places
Substituted · 26 U.S.C. § 1015(d)(2)
Pub. L. 97–34 substituted “calendar year or period” for “calendar quarter or year” in two places
Source evidence
Code amendment note
Subsec. (d)(2). Pub. L. 97–34 substituted “calendar year (or preceding calendar period)” for “calendar quarter (or calendar year if the gift was made before January 1, 1971)” and “calendar year or period” for “calendar quarter or year” in two places.Enacted provision · exact public law section
(1) Paragraph (2) of subsection (d) of section 1015 (relating to increased basis for gift tax paid) is amended— (A) by striking out “calendar quarter (or calendar year if the gift was made before January 1, 1971)” and inserting in lieu thereof “calendar year (or preceding calendar period)”, and (B) by striking out “calendar quarter or year” each place it appears and inserting in lieu thereof “calendar year or period”.Tax Reform Act of 1984
Pub. L. 98–369 div. A title IV § 421(b)(5) · 98 Stat. 494
Added · 26 U.S.C. § 1015(e)
Pub. L. 98–369 added subsec. (e)
Source evidence
Code amendment note
Subsec. (e). Pub. L. 98–369 added subsec. (e).Enacted provision · exact public law section
(5) Coordination with section 1015.— Section 1015 (relating to basis of property acquired by gifts and transfers in trust) is amended by adding at the end thereof the following new subsection: “(e) Gifts Between Spouses.— In the case of any property acquired by gift in a transfer described in section 1041(a), the basis of such property in the hands of the transferee shall be determined under section 1041(b)(2) and not this section.”Effective date note
Amendment by Pub. L. 98–369 applicable to transfers after July 18, 1984, in taxable years ending after such date, subject to election to have amendment apply to transfers after 1983 or to transfers pursuant to existing decrees, see section 421(d) of Pub. L. 98–369, set out as an Effective Date note under section 1041 of this title.
9 of 10 references resolved to an enrolled provision · 1 partial
Editorial Notes
References in Text
Section 2521, referred to in subsec. (d)(2), was repealed by Pub. L. 94–455, title XX, § 2001(b)(3), , 90 Stat. 1849.
The Internal Revenue Code of 1939, referred to in subsec. (d)(5), is act Feb. 10, 1939, ch. 2, 53 Stat. 1. Prior to the enactment of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the 1939 Code was classified to former Title 26, Internal Revenue Code. For table of comparisons of the 1939 Code to the 1986 Code, see Table I preceding section 1 of this title.
Editorial Notes
Amendments1958–1984 · 5 rounds
1984
Subsec. (e). Pub. L. 98–369 added subsec. (e).
1981
Subsec. (d)(2). Pub. L. 97–34 substituted “calendar year (or preceding calendar period)” for “calendar quarter (or calendar year if the gift was made before )” and “calendar year or period” for “calendar quarter or year” in two places.
1976
Subsec. (a). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary” in four places.
Subsec. (d)(1)(A), (B). Pub. L. 94–455, § 1901(a)(122), substituted “” for “the date of enactment of the Technical Amendments Act of 1958”.
Subsec. (d)(6). Pub. L. 94–455, § 2005(c), added par. (6).
1970
Subsec. (d)(2). Pub. L. 91–614 substituted “calendar quarter (or calendar year if the gift was made before )” for “calendar year” the first place it appears and “calendar quarter or year” for “calendar year” every other place it appears.
1958
Subsec. (d). Pub. L. 85–866 added subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 1984 Amendment
Amendment by Pub. L. 98–369 applicable to transfers after , in taxable years ending after such date, subject to election to have amendment apply to transfers after 1983 or to transfers pursuant to existing decrees, see section 421(d) of Pub. L. 98–369, set out as an Effective Date note under section 1041 of this title.
Effective Date of 1981 Amendment
Amendment by Pub. L. 97–34 applicable with respect to gifts made after , 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
Amendment by section 1901(a)(122) of Pub. L. 94–455 applicable with respect to taxable years beginning after , see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.
Pub. L. 94–455, title XX, § 2005(f), , 90 Stat. 1878, as amended by Pub. L. 95–600, title V, § 515(6), , 92 Stat. 2884, provided that:
“(1) Except as provided in paragraph (2), the amendments made by this section [enacting sections 1023, 1040, 6039A, and 6694 of this title, amending sections 691, 1016, and 1246 of this title, and renumbering former section 1023 as 1024] shall apply in respect of decedents dying after .
“(2) The amendment made by subsection (c) [amending this section] shall apply to gifts made after .”
Effective Date of 1970 Amendment
Amendment by Pub. L. 91–614 applicable with respect to gifts made after , see section 102(e) of Pub. L. 91–614, set out as a note under section 2501 of this title.
Effective Date of 1958 Amendment
Amendment by Pub. L. 85–866 applicable to taxable years beginning after , and ending after , see section 1(c)(1) of Pub. L. 85–866, set out as a note under section 165 of this title.
Credits
1954–1984 · 6 acts
- 1954Aug. 16, 1954, ch. 736, 68A Stat. 298
- 1958Pub. L. 85–866, title I, § 43(a), , 72 Stat. 1640
- 1970Pub. L. 91–614, title I, § 102(d)(1), , 84 Stat. 1841
- 1976Pub. L. 94–455, title XIX, §§ 1901(a)(122), 1906(b) (13)(A), title XX, § 2005(c), , 90 Stat. 1784, 1834, 1877
- 1981Pub. L. 97–34, title IV, § 442(d)(1), , 95 Stat. 322
- 1984Pub. L. 98–369, div. A, title IV, § 421(b)(5), , 98 Stat. 794.
Show as published
(Aug. 16, 1954, ch. 736, 68A Stat. 298; Pub. L. 85–866, title I, § 43(a), , 72 Stat. 1640; Pub. L. 91–614, title I, § 102(d)(1), , 84 Stat. 1841; Pub. L. 94–455, title XIX, §§ 1901(a)(122), 1906(b) (13)(A), title XX, § 2005(c), , 90 Stat. 1784, 1834, 1877; Pub. L. 97–34, title IV, § 442(d)(1), , 95 Stat. 322; Pub. L. 98–369, div. A, title IV, § 421(b)(5), , 98 Stat. 794.)