§ 1040. Transfer of certain farm, etc., real property

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.

1. 1976

   Pub. L. 94–455 title XX § 2005(b) · 90 Stat. 1520

   Enacted · 26 U.S.C. § 1040

   Added Pub. L. 94–455, title XX, § 2005(b), Oct. 4, 1976, 90 Stat. 1877

   Source evidence

   Code source credit
   Added Pub. L. 94–455, title XX, § 2005(b), Oct. 4, 1976, 90 Stat. 1877

   Enacted provision · exact public law section
   (b) Nonrecognition of Gain Where Certain Appreciated Carryover Basis Property Is Used in Satisfaction of a Pecuniary Request.— Part III of subchapter O of chapter 1 (relating to common uontaxable exchanges) is amended by adding at the end thereof the following new section: “SEC. 1040. USE OF CERTAIN APPRECIATED CARRYOVER BASIS PROPERTY TO SATISFY PECUNIARY REQUEST. (a) General Rule.— If the executor of the estate of any decedent satisfies the right of any person to receive a pecuniary bequest with appreciated carryover basis property (as defined in section 1023(f) Ante, p. 1872. (5)), then gain on such exchange shall be recognized to the estate only to the extent that, on the date of such exchange, the fair market value of such property exceeds the value of such property for purposes of chapter 11. “(b) Similar Rule for Certain Trusts.— To the extent provided in regulations prescribed by the Secretary, a ride similar to the rule provided in subsection (a) shall apply where— “(1) by reason of the death of t he decedent, a person has a right to receive from a trust a specific dollar amount which is the equivalent of a pecuniary bequest, and “(2) the trustee of the trust satisfies such right with carryover basis property to which section 1023 applies. “(c) Basis of Property Acquired in Exchange Described in Subsection (a) or (b).— The basis of property acquired in an exchange with respect to which gain realized is not recognized by reason of subsection (a) or (b) shall be the basis of such property immediately before the exchange, increased by the amount of the gain recognized to the estate or trust on the exchange.”

2. 1978

   Pub. L. 95–600 title VII § 702(d)(3) · 92 Stat. 2763

   Substituted · 26 U.S.C. § 1040(a)

   Pub. L. 95–600 substituted “chapter 11 (determined without regard to section 2032A)” for “chapter 11”

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 95–600 substituted “chapter 11 (determined without regard to section 2032A)” for “chapter 11”.

   Enacted provision · exact public law section
   (3) Use of farm valuation property to satisfy pecuniary bequest.— Subsection (a) of section 1040 (relating to use of 26 USC 1040. certain appreciated carryover basis property to satisfy pecuniary bequest) is amended by inserting “(determined without regard to section 2032A)” after “chapter 11”. 26 USC 2032A, 2001 et seq.

3. 1980

   Pub. L. 96–223 title IV § 401(c)(2)(A) · 94 Stat. 229

   1. Repealed · 26 U.S.C. § 1040

      Pub. L. 96–223 substituted “Use of farm, etc., property to satisfy pecuniary bequest” for “Use of certain appreciated carryover basis property to satisfy pecuniary request” in section catchline, generally revised subsecs. (a) and (b) to reflect the repeal elsewhere in the Code of carryover basis provisions

   2. Struck · 26 U.S.C. § 1040

      Pub. L. 96–223 struck out subsec. (d) which had provided that, for purposes of this section, references to carryover basis property should be treated as including a reference to property the valuation of which is determined under section 2032A. Pub. L. 96–222 added subsec. (d)

   Source evidence

   Code amendment note
   Pub. L. 96–223 substituted “Use of farm, etc., property to satisfy pecuniary bequest” for “Use of certain appreciated carryover basis property to satisfy pecuniary request” in section catchline, generally revised subsecs. (a) and (b) to reflect the repeal elsewhere in the Code of carryover basis provisions, and struck out subsec. (d) which had provided that, for purposes of this section, references to carryover basis property should be treated as including a reference to property the valuation of which is determined under section 2032A. Pub. L. 96–222 added subsec. (d).

   Enacted provision · exact public law section
   (A) Section 1040 (relating to satisfaction of a pecuniary bequest) is amended to read as follows: “SEC. 1040. USE OF FARM, ETC., REAL PROPERTY TO SATISFY PECUNIARY BEQUEST. “(a) General Rule.— If the executor of the estate of any decedent satisfies the right of a qualified heir (within the meaning of section 2032A(e)(1)) to receive a pecuniary bequest with property with respect to which an election was made under section 2032A, then gain on such exchange shall be recognized to the estate only to the extent that, on the date of such exchange, the fair market value of such property exceeds the value of such property for purposes of chapter 11 (determined without regard to section 2032A). “(b) Similar Rule for Certain Trusts.— To the extent provided in regulations prescribed by the Secretary, a rule similar to the rule provided in subsection (a) shall apply where— “(1) by reason of the death of the decedent, a qualified heir has a right to receive from a trust a specific dollar amount which is the equivalent of a pecuniary bequest, and “(2) the trustee of the trust satisfies such right with property with respect to which an election was made under section 2032A. “(c) Basis of Property Acquired in Exchange Described in Subsection (a) or (b).— The basis of property acquired in an exchange with respect to which gain realized is not recognized by reason of subsection (a) or (b) shall be the basis of such property immediately before the exchange increased by the amount of the gain recognized to the estate or trust on the exchange.”

4. 1981

   Economic Recovery Tax Act of 1981

   Pub. L. 97–34 title IV § 421(j)(2)(B) · 95 Stat. 175

   Substituted · 26 U.S.C. § 1040

   Pub. L. 97–34 substituted “Transfer of certain farm, etc., real property” for “Use of farm, etc., real property to satisfy pecuniary bequest” in section catchline

   Source evidence

   Code amendment note
   Pub. L. 97–34 substituted “Transfer of certain farm, etc., real property” for “Use of farm, etc., real property to satisfy pecuniary bequest” in section catchline.

   Enacted provision · exact public law section
   (B) Nonrecognition of gain.— The section heading and 94 Stat. 300. subsections (a) and (b) of section 1040 are amended to read as follows: “SEC. 1040. TRANSFER OF CERTAIN FARM, ETC., REAL PROPERTY. “(a) General Rule.— If the executor of the estate of any decedent transfers to a qualified heir (within the meaning of section 2032A(e)(1)) any property with respect to which an election was made under section 2032A, then gain on such transfer shall be recognized to the estate only to the extent that, on the date of such exchange, the fair market value of such property exceeds the value of such property 26 USC 2001 et seq. for purposes of chapter 11 (determined without regard to section 2032A). “(b) Similar Rule for Certain Trusts.— To the extent provided in regulations prescribed by the Secretary, a rule similar to the rule provided in subsection (a) shall apply where the trustee of a trust (any portion of which is included in the gross estate of the decedent) transfers property with respect to which an election was made under section 2032A.”

5. 1981

   Economic Recovery Tax Act of 1981

   Pub. L. 97–34 title IV § 421(j)(2)(B) · 95 Stat. 175

   1. Substituted · 26 U.S.C. § 1040(a)

      Pub. L. 97–34 revised subsec. (a) generally, substituting “transfers to a qualified heir (within the meaning of section 2032A(e)(1)) any property” for “satisfies the right of a qualified heir (within the meaning of section 2032A(e)(1)) to receive a pecuniary bequest with property” before “shall be recognized”

   2. Substituted · 26 U.S.C. § 1040(a)

      Pub. L. 97–34 revised subsec. (a) generally, substituting “such transfer” for “such exchange” before “shall be recognized”

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 97–34 revised subsec. (a) generally, substituting “transfers to a qualified heir (within the meaning of section 2032A(e)(1)) any property” for “satisfies the right of a qualified heir (within the meaning of section 2032A(e)(1)) to receive a pecuniary bequest with property” and “such transfer” for “such exchange” before “shall be recognized”.

   Enacted provision · exact public law section
   (B) Nonrecognition of gain.— The section heading and 94 Stat. 300. subsections (a) and (b) of section 1040 are amended to read as follows: “SEC. 1040. TRANSFER OF CERTAIN FARM, ETC., REAL PROPERTY. “(a) General Rule.— If the executor of the estate of any decedent transfers to a qualified heir (within the meaning of section 2032A(e)(1)) any property with respect to which an election was made under section 2032A, then gain on such transfer shall be recognized to the estate only to the extent that, on the date of such exchange, the fair market value of such property exceeds the value of such property 26 USC 2001 et seq. for purposes of chapter 11 (determined without regard to section 2032A). “(b) Similar Rule for Certain Trusts.— To the extent provided in regulations prescribed by the Secretary, a rule similar to the rule provided in subsection (a) shall apply where the trustee of a trust (any portion of which is included in the gross estate of the decedent) transfers property with respect to which an election was made under section 2032A.”

6. 1981

   Economic Recovery Tax Act of 1981

   Pub. L. 97–34 title IV § 421(j)(2)(B) · 95 Stat. 175

   Substituted · 26 U.S.C. § 1040(b)

   Pub. L. 97–34 substituted “shall apply where the trustee of a trust (any portion of which is included in the gross estate of the decedent) transfers property with respect to which an election was made under section 2032A” for “shall apply where—

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 97–34 substituted “shall apply where the trustee of a trust (any portion of which is included in the gross estate of the decedent) transfers property with respect to which an election was made under section 2032A” for “shall apply where—

   “(1) by reason of the death of the decedent, a qualified heir has a right to receive from a trust a specific dollar amount which is the equivalent of a pecuniary bequest, and “(2) the trustee of the trust satisfies such right with property with respect to which an election was made under section 2032A”.

   Enacted provision · exact public law section
   (B) Nonrecognition of gain.— The section heading and 94 Stat. 300. subsections (a) and (b) of section 1040 are amended to read as follows: “SEC. 1040. TRANSFER OF CERTAIN FARM, ETC., REAL PROPERTY. “(a) General Rule.— If the executor of the estate of any decedent transfers to a qualified heir (within the meaning of section 2032A(e)(1)) any property with respect to which an election was made under section 2032A, then gain on such transfer shall be recognized to the estate only to the extent that, on the date of such exchange, the fair market value of such property exceeds the value of such property 26 USC 2001 et seq. for purposes of chapter 11 (determined without regard to section 2032A). “(b) Similar Rule for Certain Trusts.— To the extent provided in regulations prescribed by the Secretary, a rule similar to the rule provided in subsection (a) shall apply where the trustee of a trust (any portion of which is included in the gross estate of the decedent) transfers property with respect to which an election was made under section 2032A.”

7. 1983

   Pub. L. 97–448 § 104(b)(3)(A) · 96 Stat. 2365

   Substituted · 26 U.S.C. § 1040(a)

   Pub. L. 97–448, § 104(b)(3)(A), substituted “on the date of such transfer” for “on the date of such exchange”

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 97–448, § 104(b)(3)(A), substituted “on the date of such transfer” for “on the date of such exchange”.

   Enacted provision · exact public law section
   (A) Subsection (a) of section 1040 (relating to transfer of 26 USC 1040. certain farm, etc., real property) is amended by striking out “such exchange” and inserting in lieu thereof “such transfer”.

8. 1983

   Pub. L. 97–448 § 104(b)(3)(B) · 96 Stat. 2365

   Substituted · 26 U.S.C. § 1040(c)

   Pub. L. 97–448, § 104(b)(3)(B), substituted references to “transfer”, “a transfer”, and “the transfer” for references to “exchange”, “an exchange”, and “the exchange”, respectively, wherever appearing in heading and text

   Source evidence

   Code amendment note
   Subsec. (c). Pub. L. 97–448, § 104(b)(3)(B), substituted references to “transfer”, “a transfer”, and “the transfer” for references to “exchange”, “an exchange”, and “the exchange”, respectively, wherever appearing in heading and text.

   Enacted provision · exact public law section
   (B) Subsection (c) of section 1040 is amended— (i) by striking out “an exchange” and inserting in lieu thereof “a transfer”, (ii) by striking out “the exchange” each place it appears and inserting in lieu thereof “the transfer”, and (iii) by striking out “Exchange” in the subsection heading and inserting in lieu thereof “Transfer”.

9. 2001

   Pub. L. 107–16 § 542(d)(1) · 115 Stat. 38

   Amended · 26 U.S.C. § 1040

   Pub. L. 107–16, § 542(d)(1), amended section generally. Prior to amendment, text read as follows:

   Source evidence

   Code amendment note
   Pub. L. 107–16, § 542(d)(1), amended section generally. Prior to amendment, text read as follows:

   “(a) General rule.—If the executor of the estate of any decedent transfers to a qualified heir (within the meaning of section 2032A(e)(1)) any property with respect to which an election was made under section 2032A, then gain on such transfer shall be recognized to the estate only to the extent that, on the date of such transfer, the fair market value of such property exceeds the value of such property for purposes of chapter 11 (determined without regard to section 2032A). “(b) Similar rule for certain trusts.—To the extent provided in regulations prescribed by the Secretary, a rule similar to the rule provided in subsection (a) shall apply where the trustee of a trust (any portion of which is included in the gross estate of the decedent) transfers property with respect to which an election was made under section 2032A. “(c) Basis of property acquired in transfer described in subsection (a) or (b).—The basis of property acquired in a transfer with respect to which gain realized is not recognized by reason of subsection (a) or (b) shall be the basis of such property immediately before the transfer increased by the amount of the gain recognized to the estate or trust on the transfer.”

   Enacted provision · exact public law section
   (1) In general.— Section 1040 (relating to transfer of certain farm, etc., real property) is amended to read as follows: “SEC. 1040. USE OF APPRECIATED CARRYOVER BASTS PROPERTY TO SATISFY PECUNIARY BEQUEST. “(a) In General.— If the executor of the estate of any decedent satisfies the right of any person to receive a pecuniary bequest with appreciated property, then gain on such exchange shall be recognized to the estate only to the extent that, on the date of such exchange, the fair market value of such property exceeds such value on the date of death. “(b) Similar Rule for Certain Trusts.— To the extent provided in regulations prescribed by the Secretary, a rule similar to the rule provided in subsection (a) shall apply where— “(1) by reason of the death of the decedent, a person has a right to receive from a trust a specific dollar amount which is the equivalent of a pecuniary bequest, and “(2) the trustee of a trust satisfies such right with property. “(c) Basis of Property Acquired in Exchange Described in Subsection (a) or (b).— The basis of property acquired in an exchange with respect to which gain realized is not recognized by reason of subsection (a) or (b) shall be the basis of such property immediately before the exchange increased by the amount of the gain recognized to the estate or trust on the exchange.”.

10. 2010

    Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010

    Pub. L. 111–312 title III § 301(a) · 124 Stat. 3296

    Amended · 26 U.S.C. § 1040

    Pub. L. 111–312 amended section to read as if amendment by Pub. L. 107–16, § 542(d)(1), had never been enacted. See 2001 Amendment note below

    Source evidence

    Code amendment note
    Pub. L. 111–312 amended section to read as if amendment by Pub. L. 107–16, § 542(d)(1), had never been enacted. See 2001 Amendment note below.

    Enacted provision · exact public law section
    (a) In General.— Each provision of law amended by subtitle A or E of title V of the Economic Growth and Tax Relief Reconciliation Act of 2001 26 USC 121, 684, 1014, 1022, 1040, 1221, 1246, 1291, 1296, 2210, 2664, 6018, 6019, 6075, 6716, 7701. is amended to read as such provision would read if such subtitle had never been enacted.

    Effective date note
    Amendment by Pub. L. 111–312 applicable to estates of decedents dying, and transfers made after Dec. 31, 2009, except as otherwise provided, see section 301(e) of Pub. L. 111–312, set out as an Effective and Termination Dates of 2010 Amendment note under section 121 of this title.

12 of 12 references resolved to an enrolled provision