§2801 Imposition of tax

Summary

A tax must be paid by any U.S. citizen or resident who gets a "covered gift or bequest" in a calendar year. The tax equals the highest rate in the table in section 2001(c) (as of the date received) multiplied by the value of that gift or bequest. The person who receives it must pay. The tax applies only to the part of covered gifts and bequests that goes above the dollar amount in effect under section 2503(b) for that year. The tax is reduced by any gift or estate tax already paid to a foreign country on the same gift or bequest. A "covered gift or bequest" means property received by gift from, or because of the death of, someone who is a "covered expatriate" as defined in section 877A(g)(1). It does not include property shown on timely filed gift returns under chapter 12 or estate returns under chapter 11, or property that would be deductible under sections 2055, 2056, 2522, or 2523. If a domestic trust gets a covered gift or bequest, the trust is treated like a U.S. citizen and must pay the tax. If a foreign trust distributes such property to a U.S. person, those distributions are treated as covered gifts or bequests. A U.S. person may deduct under section 164 tax paid because of a foreign-trust distribution, but only to the extent that distribution is included in their income. A foreign trust may elect to be treated as a domestic trust; that election can be revoked with the Secretary’s consent.