
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: 26USC2037]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                    Subtitle B--Estate and Gift Taxes
 
                         CHAPTER 11--ESTATE TAX
 
             Subchapter A--Estates of Citizens or Residents
 
                         PART III--GROSS ESTATE
 
Sec. 2037. Transfers taking effect at death


(a) General rule

    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) Special rules

    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,

but such term does not include a possibility that the income alone from 
such property may return to him or become subject to a power of 
disposition by him. The value of a reversionary interest immediately 
before the death of the decedent shall be determined (without regard to 
the fact of the decedent's death) by usual methods of valuation, 
including the use of tables of mortality and actuarial principles, under 
regulations prescribed by the Secretary. In determining the value of a 
possibility that property may be subject to a power of disposition by 
the decedent, such possibility shall be valued as if it were a 
possibility that such property may return to the decedent or his estate. 
Notwithstanding the foregoing, an interest so transferred shall not be 
included in the decedent's gross estate under this section if possession 
or enjoyment of the property could have been obtained by any beneficiary 
during the decedent's life through the exercise of a general power of 
appointment (as defined in section 2041) which in fact was exercisable 
immediately before the decedent's death.

(Aug. 16, 1954, ch. 736, 68A Stat. 382; Pub. L. 87-834, 
Sec. 18(a)(2)(E), Oct. 16, 1962, 76 Stat. 1052; Pub. L. 94-455, title 
XIX, Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)


                               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.


                    Effective Date of 1962 Amendment

    Amendment 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.

                  Section Referred to in Other Sections

    This section is referred to in sections 2035, 2041, 2043, 2045, 
2104, 2107, 6324 of this title.
