Title 26 — Internal Revenue CodeRelease 119-73

§2703 Certain rights and restrictions disregarded

Title 26 › Subtitle Subtitle B— - Estate and Gift Taxes › Chapter CHAPTER 14— - SPECIAL VALUATION RULES › § 2703

Last updated Apr 6, 2026|Official source

Summary

When valuing property for these tax rules, ignore any promise or right that lets someone buy or use the property for less than its fair market value, and ignore any rule that limits selling or using the property. Do not ignore them if all three are true: it is a genuine business deal; it is not a scheme to give the property to members of the decedent’s family for less than full payment in money or money’s worth; and its terms are like those unrelated parties would agree to.

Full Legal Text

Title 26, §2703

Internal Revenue Code — Source: USLM XML via OLRC

(a)For purposes of this subtitle, the value of any property shall be determined without regard to—

(1)any option, agreement, or other right to acquire or use the property at a price less than the fair market value of the property (without regard to such option, agreement, or right), or

(2)any restriction on the right to sell or use such property.

(b)Subsection (a) shall not apply to any option, agreement, right, or restriction which meets each of the following requirements:

(1)It is a bona fide business arrangement.

(2)It is not a device to transfer such property to members of the decedent’s family for less than full and adequate consideration in money or money’s worth.

(3)Its terms are comparable to similar arrangements entered into by persons in an arms’ length transaction.

Reference

Citations & Metadata

Citation

26 U.S.C. § 2703

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73