§ 2035. Adjustments for certain gifts made within 3 years of decedent’s death

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. 1954

   Aug. 16, 1954, ch. 736, 68A Stat. 381 · 68A Stat. 381

   Enacted · 26 U.S.C. § 2035

   Aug. 16, 1954, ch. 736, 68A Stat. 381

   Source evidence

   Code source credit
   Aug. 16, 1954, ch. 736, 68A Stat. 381

2. 1962

   Revenue Act of 1962

   Pub. L. 87–834 § 18(a)(2)(C) · 76 Stat. 960

   Struck · 26 U.S.C. § 2035(a)

   Pub. L. 87–834 struck out provisions which excepted real property situated outside of the United States

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 87–834 struck out provisions which excepted real property situated outside of the United States.

3. 1976

   Pub. L. 94–455 title XX § 2001(a)(5) · 90 Stat. 1520

   Substituted · 26 U.S.C. § 2035

   Pub. L. 94–455 substituted provisions covering adjustments for gifts made within 3 years of decedent’s death for provisions under which transfers by the decedent within 3 years of the decedent’s death were deemed to have been made in contemplation of death and included in the value of the gross estate

   Source evidence

   Code amendment note
   Pub. L. 94–455 substituted provisions covering adjustments for gifts made within 3 years of decedent’s death for provisions under which transfers by the decedent within 3 years of the decedent’s death were deemed to have been made in contemplation of death and included in the value of the gross estate.

   Enacted provision · exact public law section
   (5) Adjustments for gifts made within 3 tears of death.— Section 2035 (relating to transactions in contemplation of death) is amended to read as follows: “SEC. 2035. ADJUSTMENTS FOR GIFTS MADE WITHIN 3 YEARS OF DECEDENTS DEATH. “(a) Inclusion of Gifts Made by Decedent.— Except, as provided in subsection (b), the value of the gross estate shall include the value of all property to the extent of any interest-therein of which the decedent has at any time made a transfer, by trust or otherwise, during the 3-year period ending on the date of the decedent’s death. “(b) Exceptions.— Subsection (a) shall not apply to— “(1) any bona fide sale for an adequate and full consideration in money or money’s worth, and “(2) any gift, excludable in computing taxable gifts by reason of section 2503(b) (relating to $3,000 annual exclusion for purposes of the gift tax) determined without regard to section 2513 (a). “(c) Inclusion of Gift Tax on Certain Gifts Made During 3 Years Before Decedent’s Death.— The amount of the gross estate (determined without regard to this subsection) shall be increased by the amount of any tax paid under chapter 12 by the decedent or his estate on any gift made by the decedent or his spouse after Decem-ber 31, 1976, and dining the 3-year period ending on the date of the decedent’s death.”

4. 1978

   Pub. L. 95–600 title VII § 702(f)(1) · 92 Stat. 2763

   1. Substituted · 26 U.S.C. § 2035(b)

      Pub. L. 95–600 substituted in par. (2) provisions relating to gifts for which donee was not required by section 6019 to file gift tax returns for provisions relating to gifts excludable in computing taxable gifts by reason of section 2503(b)

   2. Inserted · 26 U.S.C. § 2035(b)

      Pub. L. 95–600 inserted provisions following par. (2) relating to inapplicability of par. (2) to transfers respecting life insurance policies

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 95–600 substituted in par. (2) provisions relating to gifts for which donee was not required by section 6019 to file gift tax returns for provisions relating to gifts excludable in computing taxable gifts by reason of section 2503(b) and inserted provisions following par. (2) relating to inapplicability of par. (2) to transfers respecting life insurance policies.

   Enacted provision · exact public law section
   (1) Amendment of section 2035(b).— Subsection (b) of section 26 USC 2035. 2035 (relating to adjustments for gifts made within 3 years of decedent’s death) is amended to read as follows: “(b) Exceptions.— Subsection (a) shall not apply— “(1) to any bona fide sale for an adequate and full consideration in money or money’s worth, and “(2) to any gift to a donee made during a calendar year if the decedent was not required by section 6019 to file any gift tax return for such year with respect to gifts to such donee. Paragraph (2) shall not apply to any transfer with respect to a life insurance policy.”

5. 1981

   Economic Recovery Tax Act of 1981

   Pub. L. 97–34 § 403(b)(3)(B) · 95 Stat. 175

   Inserted · 26 U.S.C. § 2035(b)(2)

   Pub. L. 97–34, § 403(b)(3)(B), inserted “(other than by reason of section 6019(a)(2))” after “section 6019”

   Source evidence

   Code amendment note
   Subsec. (b)(2). Pub. L. 97–34, § 403(b)(3)(B), inserted “(other than by reason of section 6019(a)(2))” after “section 6019”.

   Enacted provision · exact public law section
   (B) Paragraph (2) of section 2035(b) is amended by inserting 26 USC 2035. “(other than by reason of section 6019(a)(2))” after “section 6019”.

6. 1981

   Economic Recovery Tax Act of 1981

   Pub. L. 97–34 § 424(a) · 95 Stat. 175

   Added · 26 U.S.C. § 2035(d)

   Pub. L. 97–34, § 424(a), added subsec. (d)

   Source evidence

   Code amendment note
   Subsec. (d). Pub. L. 97–34, § 424(a), added subsec. (d).

   Enacted provision · exact public law section
   (a) General Rule.— Section 2035 (relating to adjustments for gifts 26 USC 2035. made within 3 years of decedent’s death) is amended by adding at the end thereof the following new subsection: “(d) Decedents Dying After 1981.— “(1) In general.— Except as otherwise provided in this subsection, subsection (a) shall not apply to the estate of a decedent dying after December 31, 1981. “(2) Exceptions for certain transfers.— Paragraph (1) shall not apply to a transfer of an interest in property which is included in the value of the gross estate under section 2036, 2037, 2038, 2041, or 2042 or would have been included under any of such sections if such interest had been retained by the decedent. “(3) 3-year rule retained for certain purposes.— Paragraph (1) shall not apply for purposes of— “(A) section 30303) (relating to distributions in redemption of stock to pay death taxes), “(B) section 2032A (relating to special valuation of certain farm, etc., real property), “(C) section 6166 (relating to extension of time for payment of estate tax where estate consists largely of interest in closely held business), and “(D) subchapter C of chapter 64 (relating to lien for 26 USC 6321. taxes).”

7. 1983

   Pub. L. 97–448 § 104(a)(9) · 96 Stat. 2365

   Substituted · 26 U.S.C. § 2035(b)(2)

   Pub. L. 97–448, § 104(a)(9), substituted “section 6019(2)” for “section 6019(a)(2)”

   Source evidence

   Code amendment note
   Subsec. (b)(2). Pub. L. 97–448, § 104(a)(9), substituted “section 6019(2)” for “section 6019(a)(2)”.

   Enacted provision · exact public law section
   (9) Clerical amendment.— Paragraph (2) of section 2035(b) 26 USC 2035. is amended by striking out “section 6019(a)(2)” and inserting in lieu thereof “section 6019(2)”.

8. 1983

   Pub. L. 97–448 § 104(d)(2) · 96 Stat. 2365

   1. Inserted · 26 U.S.C. § 2035(d)(2)

      Pub. L. 97–448, § 104(d)(2), inserted “of this subsection and paragraph (2) of subsection (b)” after “Paragraph (1)”

   2. Struck · 26 U.S.C. § 2035(d)(2)

      Pub. L. 97–448, § 104(d)(2), struck out “2041,” after “2038,”

   Source evidence

   Code amendment note
   Subsec. (d)(2). Pub. L. 97–448, § 104(d)(2), inserted “of this subsection and paragraph (2) of subsection (b)” after “Paragraph (1)”, and struck out “2041,” after “2038,”.

   Enacted provision · exact public law section
   (2) Exceptions for certain transfers.— Paragraph (2) of section 2035(d) (relating to exceptions for certain transfers) is amended— (A) by inserting “of this subsection and paragraph (2) of subsection (b)” after “Paragraph (1)”, and (B) by striking out “2041,”.

9. 1983

   Pub. L. 97–448 § 104(d)(1)(C) · 96 Stat. 2365

   Redesignated · 26 U.S.C. § 2035(d)(3)(C); 26 U.S.C. § 2035(d)(3)(D)

   Pub. L. 97–448, § 104(d)(1)(C), redesignated subpar. (D) as (C). Former subpar. (C), which referred to section 6166 (relating to extension of time for payment of estate tax where estate consists largely of interest in closely held business), was struck out

   Source evidence

   Code amendment note
   Subsec. (d)(3)(C), (D). Pub. L. 97–448, § 104(d)(1)(C), redesignated subpar. (D) as (C). Former subpar. (C), which referred to section 6166 (relating to extension of time for payment of estate tax where estate consists largely of interest in closely held business), was struck out.

   Enacted provision · exact public law section
   (C) Conforming amendment.— Paragraph (3) of section 2035(d) is amended by striking out subparagraph (C), by adding “and” at the end of subparagraph (B), and by redesignating subparagraph (D) as subparagraph (C).

10. 1983

    Pub. L. 97–448 § 104(d)(1)(A) · 96 Stat. 2365

    Added · 26 U.S.C. § 2035(d)(4)

    Pub. L. 97–448, § 104(d)(1)(A), added par. (4)

    Source evidence

    Code amendment note
    Subsec. (d)(4). Pub. L. 97–448, § 104(d)(1)(A), added par. (4).

    Enacted provision · exact public law section
    (A) In general.— Subsection (d) of section 2035 (relating 26 USC 2035. to adjustments for gifts made within 3 years of decedent’s death) is amended by adding at the end thereof the following new paragraph: “(4) Coordination of 3-year rule with section 6166(a)(1).— An estate shall be treated as meeting the 35-percent of adjusted gross estate requirement of section 6166(a)(1) only if the estate meets such requirement both with and without the application of paragraph (1).”

11. 1997

    Pub. L. 105–34 title XIII § 1310(a) · 111 Stat. 788

    Amended · 26 U.S.C. § 2035

    Pub. L. 105–34 amended section catchline and text generally. Prior to amendment, section consisted of subsecs. (a) to (d) relating to adjustments for gifts made within 3 years of decedent’s death

    Source evidence

    Code amendment note
    Pub. L. 105–34 amended section catchline and text generally. Prior to amendment, section consisted of subsecs. (a) to (d) relating to adjustments for gifts made within 3 years of decedent’s death.

    Enacted provision · exact public law section
    (a) General Rule.— Section 2035 is amended to read as follows: “SEC. 2035. ADJUSTMENTS FOR CERTAIN GIFTS MADE WITHIN 3 YEARS OF DECEDENTS DEATH. “(a) Inclusion of Certain Property in Gross Estate.— If— “(1) the decedent made a transfer (by trust or otherwise) of an interest in any property, or relinquished a power with respect to any property, during the 3-year period ending on the date of the decedent’s death, and “(2) the value of such property (or an interest therein) would have been included in the decedent’s gross estate under section 2036, 2037, 2038, or 2042 if such transferred interest or relinquished power had been retained by the decedent on the date of his death, the value of the gross estate shall include the value of any property (or interest therein) which would have been so included. “(b) Inclusion of Gift Tax on Gifts Made During 3 Years Before Decedent’s Death.— The amount of the gross estate (determined without regard to this subsection) shall be increased by the amount of any tax paid under chapter 12 by the decedent or his estate on any girt made by the decedent or his spouse during the 3-year period ending on the date of the decedent’s death. “(c) Other Rules Relating to Transfers Within 3 Years of Death.— “(1) In general.— For purposes of— “(A) section 303(b) (relating to distributions in redemption of stock to pay death taxes), “(B) section 2032A (relating to special valuation of certain farms, etc., real property), and “(C) subchapter C of chapter 64 (relating to lien for taxes), the value of the gross estate shall include the value of all property to the extent of any interest therein of which the decedent has at any time made a transfer, by trust or otherwise, during the 3-year period ending on the date of the decedent’s death. “(2) Coordination with section 6166.— An estate shall be treated as meeting the 35 percent of adjusted gross estate requirement of section 6166(a)(1) only if the estate meets such requirement both with and without the application of paragraph (1). “(3) Marital and small transfers.—Paragraph (1) shall not apply to any transfer (other than a transfer with respect to a life insurance policy) made during a calendar year to any donee if the decedent was not required by section 6019 (other than by reason of section 6019(2)) to file any gift tax return for such year with respect to transfers to such donee. “(d) Exception.— Subsection (a) shall not apply to any bona fide sale for an adequate and full consideration in money or money’s worth. “(e) Treatment of Certain Transfers From Revocable Trusts.— For purposes of this section and section 2038, any transfer from any portion of a trust during any period that such portion was treated under section 676 as owned by the decedent by reason of a power in the grantor (determined without regard to section 672(e)) shall be treated as a transfer made directly by the decedent.”.

    Effective date note
    Pub. L. 105–34, title XIII, § 1310(c), Aug. 5, 1997, 111 Stat. 1044, provided that: “The amendments made by this section [amending this section] shall apply to the estates of decedents dying after the date of the enactment of this Act [Aug. 5, 1997].”

12. 2000

    Consolidated Appropriations Act, 2001

    Pub. L. 106–554 § 1(a)(7)(tIII)(s319)(14)(A) · 114 Stat. 2763

    Substituted · 26 U.S.C. § 2035(c)(2)

    Pub. L. 106–554, § 1(a)(7) [title III, § 319(14)(A)], substituted “subsection (a)” for “paragraph (1)”

    Source evidence

    Code amendment note
    Subsec. (c)(2). Pub. L. 106–554, § 1(a)(7) [title III, § 319(14)(A)], substituted “subsection (a)” for “paragraph (1)”.

    Enacted provision · exact public law section
    (7) H.R. 5662, as introduced on December 14, 2000.

13. 2000

    Consolidated Appropriations Act, 2001

    Pub. L. 106–554 § 1(a)(7)(tIII)(s319)(14)(B) · 114 Stat. 2763

    Inserted · 26 U.S.C. § 2035(d)

    Pub. L. 106–554, § 1(a)(7) [title III, § 319(14)(B)], inserted “and paragraph (1) of subsection (c)” after “Subsection (a)”

    Source evidence

    Code amendment note
    Subsec. (d). Pub. L. 106–554, § 1(a)(7) [title III, § 319(14)(B)], inserted “and paragraph (1) of subsection (c)” after “Subsection (a)”.

    Enacted provision · exact public law section
    (7) H.R. 5662, as introduced on December 14, 2000.

13 of 15 references resolved to an enrolled provision · 2 partial