§2037 — Title 26 Internal Revenue Code | U.S. Code

Summary

The estate must count as part of what the person owned any property they transferred after September 7, 1916, unless it was a real sale for full payment. This applies when only someone who outlives the person can get or use the property, and the person kept a reversionary interest that, right before death, was worth more than 5 percent of the property's value. For transfers made before October 8, 1949, that reversionary interest must have come from the transfer document itself. Reversionary interest examples: may return to the person or their estate; may be subject to a power letting the person control who gets it.

Title 26, §2037

Internal Revenue Code — Source: USLM XML via OLRC

(a)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 after September 7, 1916, made a transfer (except in case of a bona fide sale for an adequate and full consideration in money or money’s worth), by trust or otherwise, if—

(1)possession or enjoyment of the property can, through ownership of such interest, be obtained only by surviving the decedent, and

(2)the decedent has retained a reversionary interest in the property (but in the case of a transfer made before October 8, 1949, only if such reversionary interest arose by the express terms of the instrument of transfer), and the value of such reversionary interest immediately before the death of the decedent exceeds 5 percent of the value of such property.

(b)For purposes of this section, the term “reversionary interest” includes a possibility that property transferred by the decedent—

(1)may return to him or his estate, or

(2)may be subject to a power of disposition by him,

Notes & Related Subsidiaries

Editorial Notes

Amendments

1976—Subsec. (b). Pub. L. 94–455 struck out “or his delegate” after “Secretary”. 1962—Subsec. (a). Pub. L. 87–834 struck out provisions which excepted real property situated outside of the United States.

Statutory Notes and Related Subsidiaries

Effective Date

of 1962 AmendmentAmendment by Pub. L. 87–834 applicable to estates of decedents dying after Oct. 16, 1962, except as otherwise provided, see section 18(b) of Pub. L. 87–834, set out as a note under section 2031 of this title.

§2037 Transfers Taking Effect at Death