Title 26, Internal Revenue CodeRelease 119-110
§2703 Certain Rights and Restrictions Disregarded
Title 26 › Subtitle B — Estate and Gift Taxes › CHAPTER 14 — SPECIAL VALUATION RULES › § 2703
Summary
Treat property value for tax rules as if any low-price option or any restriction on selling or using the property did not exist, except when all three are true: it's a real business deal, it's not a way to transfer the property to members of the decedent’s family for less than full fair payment, and its terms match ordinary deals between unrelated parties.
Full Legal Text
Title 26, §2703
Internal Revenue Code, Source: USLM XML via OLRC
(a)General rule
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)Exceptions
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
Sep 22, 2026
Release point: 119-110