Title 26 — Internal Revenue CodeRelease 119-73

§102 Gifts and Inheritances

Title 26 › Subtitle Subtitle A— Income Taxes › Chapter 1— NORMAL TAXES AND SURTAXES › Subchapter B— Computation of Taxable Income › Part III— ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME › § 102

Last updated Apr 6, 2026|Official source

Summary

You do not pay income tax on the value of property you receive as a gift or inheritance. But the income that property later earns is taxable, and if what you were given is itself a stream of income from property, that income is taxable too. The exclusion also does not cover amounts an employer transfers to or for an employee, though separate rules can exclude certain employee achievement awards and small fringe benefits.

Full Legal Text

Title 26, §102

Internal Revenue Code — Source: USLM XML via OLRC

(a)Gross income does not include the value of property acquired by gift, bequest, devise, or inheritance.

(b)Subsection (a) shall not exclude from gross income—

(1)the income from any property referred to in subsection (a); or

(2)where the gift, bequest, devise, or inheritance is of income from property, the amount of such income.

(c)(1)Subsection (a) shall not exclude from gross income any amount transferred by or for an employer to, or for the benefit of, an employee.

(2)For provisions excluding certain employee achievement awards from gross income, see section 74(c). For provisions excluding certain de minimis fringes from gross income, see section 132(e).

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

1986—Subsec. (c). Pub. L. 99–514 added subsec. (c).

Statutory Notes and Related Subsidiaries

Effective Date

of 1986 AmendmentAmendment by Pub. L. 99–514 applicable to prizes and awards granted after Dec. 31, 1986, see section 151(c) of Pub. L. 99–514, set out as a note under section 1 of this title.

Reference

Citations & Metadata

Citation

26 U.S.C. § 102

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73