§2801 Imposition of Tax

Summary

A tax must be paid when a United States citizen or resident receives a "covered gift or bequest" from a covered expatriate. The tax equals the highest rate shown in the table in section 2001(c) on the date of receipt multiplied by the value of the gift or bequest. The person who gets the gift or bequest must pay the tax. The tax applies only to the part of gifts and bequests in a year that exceed the dollar amount in section 2503(b). The tax is reduced by any gift or estate tax already paid to a foreign country. A "covered gift or bequest" means property received by gift from, or by reason of the death of, someone who is a covered expatriate (defined in section 877A(g)(1)). It does not include property already shown on timely Chapter 12 (gift) or Chapter 11 (estate) returns, or property that would be deductible as to a spouse or charity under sections 2055, 2056, 2522, or 2523. Gifts to a domestic trust are treated like gifts to a U.S. person and the trust pays the tax. Distributions from a foreign trust to a U.S. person are treated as covered gifts or bequests; the recipient may deduct tax paid under section 164 to the extent the distribution is taxable income, and a foreign trust may elect to be treated as domestic for this rule.