
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC1015]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
          Subchapter O--Gain or Loss on Disposition of Property
 
               PART II--BASIS RULES OF GENERAL APPLICATION
 
Sec. 1015. Basis of property acquired by gifts and transfers in 
        trust
        

(a) Gifts after December 31, 1920

    If the property was acquired by gift after December 31, 1920, the 
basis shall be the same as it would be in the hands of the donor or the 
last preceding owner by whom it was not acquired by gift, except that if 
such basis (adjusted for the period before the date of the gift as 
provided in section 1016) is greater than the fair market value of the 
property at the time of the gift, then for the purpose of determining 
loss the basis shall be such fair market value. If the facts necessary 
to determine the basis in the hands of the donor or the last preceding 
owner are unknown to the donee, the Secretary shall, if possible, obtain 
such facts from such donor or last preceding owner, or any other person 
cognizant thereof. If the Secretary finds it impossible to obtain such 
facts, the basis in the hands of such donor or last preceding owner 
shall be the fair market value of such property as found by the 
Secretary as of the date or approximate date at which, according to the 
best information that the Secretary is able to obtain, such property was 
acquired by such donor or last preceding owner.

(b) Transfer in trust after December 31, 1920

    If the property was acquired after December 31, 1920, by a transfer 
in trust (other than by a transfer in trust by a gift, bequest, or 
devise), the basis shall be the same as it would be in the hands of the 
grantor increased in the amount of gain or decreased in the amount of 
loss recognized to the grantor on such transfer under the law applicable 
to the year in which the transfer was made.

(c) Gift or transfer in trust before January 1, 1921

    If the property was acquired by gift or transfer in trust on or 
before December 31, 1920, the basis shall be the fair market value of 
such property at the time of such acquisition.

(d) Increased basis for gift tax paid

                           (1) In general

        If--
            (A) the property is acquired by gift on or after September 
        2, 1958, the basis shall be the basis determined under 
        subsection (a), increased (but not above the fair market value 
        of the property at the time of the gift) by the amount of gift 
        tax paid with respect to such gift, or
            (B) the property was acquired by gift before September 2, 
        1958, and has not been sold, exchanged, or otherwise disposed of 
        before such date, the basis of the property shall be increased 
        on such date by the amount of gift tax paid with respect to such 
        gift, but such increase shall not exceed an amount equal to the 
        amount by which the fair market value of the property at the 
        time of the gift exceeded the basis of the property in the hands 
        of the donor at the time of the gift.

             (2) Amount of tax paid with respect to gift

        For purposes of paragraph (1), the amount of gift tax paid with 
    respect to any gift is an amount which bears the same ratio to the 
    amount of gift tax paid under chapter 12 with respect to all gifts 
    made by the donor for the calendar year (or preceding calendar 
    period) in which such gift is made as the amount of such gift bears 
    to the taxable gifts (as defined in section 2503(a) but computed 
    without the deduction allowed by section 2521) made by the donor 
    during such calendar year or period. For purposes of the preceding 
    sentence, the amount of any gift shall be the amount included with 
    respect to such gift in determining (for the purposes of section 
    2503(a)) the total amount of gifts made during the calendar year or 
    period, reduced by the amount of any deduction allowed with respect 
    to such gift under section 2522 (relating to charitable deduction) 
    or under section 2523 (relating to marital deduction).

          (3) Gifts treated as made one-half by each spouse

        For purposes of paragraph (1), where the donor and his spouse 
    elected, under section 2513 to have the gift considered as made one-
    half by each, the amount of gift tax paid with respect to such gift 
    under chapter 12 shall be the sum of the amounts of tax paid with 
    respect to each half of such gift (computed in the manner provided 
    in paragraph (2)).

                (4) Treatment as adjustment to basis

        For purposes of section 1016(b), an increase in basis under 
    paragraph (1) shall be treated as an adjustment under section 
    1016(a).

                (5) Application to gifts before 1955

        With respect to any property acquired by gift before 1955, 
    references in this subsection to any provision of this title shall 
    be deemed to refer to the corresponding provision of the Internal 
    Revenue Code of 1939 or prior revenue laws which was effective for 
    the year in which such gift was made.

       (6) Special rule for gifts made after December 31, 1976

        (A) In general

            In the case of any gift made after December 31, 1976, the 
        increase in basis provided by this subsection with respect to 
        any gift for the gift tax paid under chapter 12 shall be an 
        amount (not in excess of the amount of tax so paid) which bears 
        the same ratio to the amount of tax so paid as--
                (i) the net appreciation in value of the gift, bears to
                (ii) the amount of the gift.

        (B) Net appreciation

            For purposes of paragraph (1), the net appreciation in value 
        of any gift is the amount by which the fair market value of the 
        gift exceeds the donor's adjusted basis immediately before the 
        gift.

(e) Gifts between spouses

    In the case of any property acquired by gift in a transfer described 
in section 1041(a), the basis of such property in the hands of the 
transferee shall be determined under section 1041(b)(2) and not this 
section.

(Aug. 16, 1954, ch. 736, 68A Stat. 298; Pub. L. 85-866, title I, 
Sec. 43(a), Sept. 2, 1958, 72 Stat. 1640; Pub. L. 91-614, title I, 
Sec. 102(d)(1), Dec. 31, 1970, 84 Stat. 1841; Pub. L. 94-455, title XIX, 
Secs. 1901(a)(122), 1906(b) (13)(A), title XX, Sec. 2005(c), Oct. 4, 
1976, 90 Stat. 1784, 1834, 1877; Pub. L. 97-34, title IV, 
Sec. 442(d)(1), Aug. 13, 1981, 95 Stat. 322; Pub. L. 98-369, div. A, 
title IV, Sec. 421(b)(5), July 18, 1984, 98 Stat. 794.)

                       References in Text

    Section 2521, referred to in subsec. (d)(2), was repealed by Pub. L. 
94-455, title XX, Sec. 2001(b)(3), Oct. 4, 1976, 90 Stat. 1849.
    The Internal Revenue Code of 1939, referred to in subsec. (d)(5), is 
act Feb. 10, 1939, ch. 2, 53 Stat. 1, as amended. Prior to the enactment 
of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the 1939 
Code was classified to former Title 26, Internal Revenue Code. For table 
of comparisons of the 1939 Code to the 1986 Code, see Table I preceding 
section 1 of this title.


                               Amendments

    1984--Subsec. (e). Pub. L. 98-369 added subsec. (e).
    1981--Subsec. (d)(2). Pub. L. 97-34 substituted ``calendar year (or 
preceding calendar period)'' for ``calendar quarter (or calendar year if 
the gift was made before January 1, 1971)'' and ``calendar year or 
period'' for ``calendar quarter or year'' in two places.
    1976--Subsec. (a). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out 
``or his delegate'' after ``Secretary'' in four places.
    Subsec. (d)(1)(A), (B). Pub. L. 94-455, Sec. 1901(a)(122), 
substituted ``September 2, 1958'' for ``the date of enactment of the 
Technical Amendments Act of 1958''.
    Subsec. (d)(6). Pub. L. 94-455, Sec. 2005(c), added par. (6).
    1970--Subsec. (d)(2). Pub. L. 91-614 substituted ``calendar quarter 
(or calendar year if the gift was made before January 1, 1971)'' for 
``calendar year'' the first place it appears and ``calendar quarter or 
year'' for ``calendar year'' every other place it appears.
    1958--Subsec. (d). Pub. L. 85-866 added subsec. (d).


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-369 applicable to transfers after July 18, 
1984, in taxable years ending after such date, subject to election to 
have amendment apply to transfers after 1983 or to transfers pursuant to 
existing decrees, see section 421(d) of Pub. L. 98-369, set out as an 
Effective Date note under section 1041 of this title.


                    Effective Date of 1981 Amendment

    Amendment by Pub. L. 97-34 applicable with respect to gifts made 
after Dec. 31, 1981, see section 442(e) of Pub. L. 97-34, set out as a 
note under section 2501 of this title.


                    Effective Date of 1976 Amendment

    Amendment by section 1901(a)(122) of Pub. L. 94-455 applicable with 
respect to taxable years beginning after Dec. 31, 1976, see section 
1901(d) of Pub. L. 94-455, set out as a note under section 2 of this 
title.
    Section 2005(f) of Pub. L. 94-455, as amended by Pub. L. 95-600, 
title V, Sec. 515(6), Nov. 6, 1978, 92 Stat. 2884, provided that:
    ``(1) Except as provided in paragraph (2), the amendments made by 
this section [enacting sections 1023, 1040, 6039A, and 6694 of this 
title, amending sections 691, 1016, and 1246 of this title, and 
renumbering former section 1023 as 1024] shall apply in respect of 
decedents dying after December 31, 1979.
    ``(2) The amendment made by subsection (c) [amending this section] 
shall apply to gifts made after December 31, 1976.''


                    Effective Date of 1970 Amendment

    Amendment by Pub. L. 91-614 applicable with respect to gifts made 
after Dec. 31, 1970, see section 102(e) of Pub. L. 91-614, set out as a 
note under section 2501 of this title.


                    Effective Date of 1958 Amendment

    Amendment by Pub. L. 85-866 applicable to taxable years beginning 
after Dec. 31, 1953, and ending after Aug. 16, 1954, see section 1(c)(1) 
of Pub. L. 85-866, set out as a note under section 165 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 382, 1001, 1312, 2056A, 
2511, 2654 of this title.
