
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: 26USC2038]

 
                     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. 2038. Revocable transfers


(a) In general

    The value of the gross estate shall include the value of all 
property.

                  (1) Transfers after June 22, 1936

        To the extent of any interest therein of which the decedent has 
    at any time 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, where the enjoyment thereof was subject at the 
    date of his death to any change through the exercise of a power (in 
    whatever capacity exercisable) by the decedent alone or by the 
    decedent in conjunction with any other person (without regard to 
    when or from what source the decedent acquired such power), to 
    alter, amend, revoke, or terminate, or where any such power is 
    relinquished during the 3 year period ending on the date of the 
    decedent's death.

              (2) Transfers on or before June 22, 1936

        To the extent of any interest therein of which the decedent has 
    at any time 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, where the enjoyment thereof was subject at the 
    date of his death to any change through the exercise of a power, 
    either by the decedent alone or in conjunction with any person, to 
    alter, amend, or revoke, or where the decedent relinquished any such 
    power during the 3 year period ending on the date of the decedent's 
    death. Except in the case of transfers made after June 22, 1936, no 
    interest of the decedent of which he has made a transfer shall be 
    included in the gross estate under paragraph (1) unless it is 
    includible under this paragraph.

(b) Date of existence of power

    For purposes of this section, the power to alter, amend, revoke, or 
terminate shall be considered to exist on the date of the decedent's 
death even though the exercise of the power is subject to a precedent 
giving of notice or even though the alteration, amendment, revocation, 
or termination takes effect only on the expiration of a stated period 
after the exercise of the power, whether or not on or before the date of 
the decedent's death notice has been given or the power has been 
exercised. In such cases proper adjustment shall be made representing 
the interests which would have been excluded from the power if the 
decedent had lived, and for such purpose, if the notice has not been 
given or the power has not been exercised on or before the date of his 
death, such notice shall be considered to have been given, or the power 
exercised, on the date of his death.

(Aug. 16, 1954, ch. 736, 68A Stat. 383; Pub. L. 86-141, Sec. 1, Aug. 7, 
1959, 73 Stat. 288; Pub. L. 87-834, Sec. 18(a)(2)(F), Oct. 16, 1962, 76 
Stat. 1052; Pub. L. 94-455, title XIX, Sec. 1902 (a)(3), title XX, 
Sec. 2001(c)(1)(K), Oct. 4, 1976, 90 Stat. 1804, 1852.)


                               Amendments

    1976--Subsec. (a)(1). Pub. L. 94-455, Sec. 2001(c)(1)(K)(i), 
substituted ``during the 3-year period ending on the date of the 
decedent's death'' for ``in contemplation of decedent's death''.
    Subsec. (a)(2). Pub. L. 94-455, Sec. 2001(c)(1)(K)(ii), substituted 
``during the 3-year period ending on the date of the decedent's death'' 
for ``in contemplation of his death''.
    Subsec. (c). Pub. L. 94-455, Sec. 1902(a)(3), struck out subsec. (c) 
which covered the effect of a disability in certain cases by relating a 
mental disability to relinquish a power to a power, the relinquishment 
of which would be deemed not to be a transfer for purposes of chapter 4 
of the Internal Revenue Code of 1939.
    1962--Subsec. (a). Pub. L. 87-834 struck out provisions which 
excepted real property situated outside of the United States.
    1959--Subsec. (c). Pub. L. 86-141 added subsec. (c).


                    Effective Date of 1976 Amendment

    Amendment by section 1902(a)(3) of Pub. L. 94-455 applicable to 
estates of decedents dying after Oct. 4, 1976, see section 1902(c)(1) of 
Pub. L. 94-455, set out as a note under section 2011 of this title.
    Amendment by section 2001(c)(1)(K)(i), (ii) of Pub. L. 94-455 
applicable to estates of decedents dying after Dec. 31, 1976 but not to 
transfers made before Jan. 1, 1977, see section 2001(d)(1) of Pub. L. 
94-455, set out as a note under section 2001 of this title.


                    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.


                    Effective Date of 1959 Amendment

    Section 2 of Pub. L. 86-141 provided that: ``The amendment made by 
the first section of this Act [amending this section] shall apply only 
with respect to estates of decedents dying after August 16, 1954. No 
interest shall be allowed or paid on any overpayment resulting from the 
application of the amendment made by the first section of this Act with 
respect to any payment made before the date of the enactment of this Act 
[Aug. 7, 1959].''

                  Section Referred to in Other Sections

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