26 USC 2801 – Imposition of tax
(a) In general
If, during any calendar year, any United States citizen or resident receives any covered gift or bequest, there is hereby imposed a tax equal to the product of—
(1) the highest rate of tax specified in the table contained in section 2001(c) as in effect on the date of such receipt, and
(2) the value of such covered gift or bequest.
(b) Tax to be paid by recipient
Terms Used In 26 USC 2801
- Bequest: Property gifted by will.
- Decedent: A deceased person.
- domestic: when applied to a corporation or partnership means created or organized in the United States or under the law of the United States or of any State unless, in the case of a partnership, the Secretary provides otherwise by regulations. See 26 USC 7701
- Donor: The person who makes a gift.
- foreign: when applied to a corporation or partnership means a corporation or partnership which is not domestic. See 26 USC 7701
- foreign trust: means any trust other than a trust described in subparagraph (E) of paragraph (30). See 26 USC 7701
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
- Gross estate: The total fair market value of all property and property interests, real and personal, tangible and intangible, of which a decedent had beneficial ownership at the time of death before subtractions for deductions, debts, administrative expenses, and casualty losses suffered during estate administration.
- individual: shall include every infant member of the species homo sapiens who is born alive at any stage of development. See 1 USC 8
- paid or accrued: shall be construed according to the method of accounting upon the basis of which the taxable income is computed under subtitle A. See 26 USC 7701
- person: shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation. See 26 USC 7701
- Secretary: means the Secretary of the Treasury or his delegate. See 26 USC 7701
- United States: when used in a geographical sense includes only the States and the District of Columbia. See 26 USC 7701
- United States person: means &mdash. See 26 USC 7701
The tax imposed by subsection (a) on any covered gift or bequest shall be paid by the person receiving such gift or bequest.
(c) Exception for certain gifts
Subsection (a) shall apply only to the extent that the value of covered gifts and bequests received by any person during the calendar year exceeds the dollar amount in effect under section 2503(b) for such calendar year.
(d) Tax reduced by foreign gift or estate tax
The tax imposed by subsection (a) on any covered gift or bequest shall be reduced by the amount of any gift or estate tax paid to a foreign country with respect to such covered gift or bequest.
(e) Covered gift or bequest
(1) In general
For purposes of this chapter, the term “covered gift or bequest” means—
(A) any property acquired by gift directly or indirectly from an individual who, at the time of such acquisition, is a covered expatriate, and
(B) any property acquired directly or indirectly by reason of the death of an individual who, immediately before such death, was a covered expatriate.
(2) Exceptions for transfers otherwise subject to estate or gift tax
Such term shall not include—
(A) any property shown on a timely filed return of tax imposed by chapter 12 which is a taxable gift by the covered expatriate, and
(B) any property included in the gross estate of the covered expatriate for purposes of chapter 11 and shown on a timely filed return of tax imposed by chapter 11 of the estate of the covered expatriate.
(3) Exceptions for transfers to spouse or charity
Such term shall not include any property with respect to which a deduction would be allowed under section 2055, 2056, 2522, or 2523, whichever is appropriate, if the decedent or donor were a United States person.
(4) Transfers in trust
(A) Domestic trusts
In the case of a covered gift or bequest made to a domestic trust—
(i) subsection (a) shall apply in the same manner as if such trust were a United States citizen, and
(ii) the tax imposed by subsection (a) on such gift or bequest shall be paid by such trust.
(B) Foreign trusts
(i) In general
In the case of a covered gift or bequest made to a foreign trust, subsection (a) shall apply to any distribution attributable to such gift or bequest from such trust (whether from income or corpus) to a United States citizen or resident in the same manner as if such distribution were a covered gift or bequest.
(ii) Deduction for tax paid by recipient
There shall be allowed as a deduction under section 164 the amount of tax imposed by this section which is paid or accrued by a United States citizen or resident by reason of a distribution from a foreign trust, but only to the extent such tax is imposed on the portion of such distribution which is included in the gross income of such citizen or resident.
(iii) Election to be treated as domestic trust
Solely for purposes of this section, a foreign trust may elect to be treated as a domestic trust. Such an election may be revoked with the consent of the Secretary.
(f) Covered expatriate
For purposes of this section, the term “covered expatriate” has the meaning given to such term by section 877A(g)(1).