
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: 26USC2040]

 
                     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. 2040. Joint interests


(a) General rule

    The value of the gross estate shall include the value of all 
property to the extent of the interest therein held as joint tenants 
with right of survivorship by the decedent and any other person, or as 
tenants by the entirety by the decedent and spouse, or deposited, with 
any person carrying on the banking business, in their joint names and 
payable to either or the survivor, except such part thereof as may be 
shown to have originally belonged to such other person and never to have 
been received or acquired by the latter from the decedent for less than 
an adequate and full consideration in money or money's worth: Provided, 
That where such property or any part thereof, or part of the 
consideration with which such property was acquired, is shown to have 
been at any time acquired by such other person from the decedent for 
less than an adequate and full consideration in money or money's worth, 
there shall be excepted only such part of the value of such property as 
is proportionate to the consideration furnished by such other person: 
Provided further, That where any property has been acquired by gift, 
bequest, devise, or inheritance, as a tenancy by the entirety by the 
decedent and spouse, then to the extent of one-half of the value 
thereof, or, where so acquired by the decedent and any other person as 
joint tenants with right of survivorship and their interests are not 
otherwise specified or fixed by law, then to the extent of the value of 
a fractional part to be determined by dividing the value of the property 
by the number of joint tenants with right of survivorship.

(b) Certain joint interests of husband and wife

         (1) Interests of spouse excluded from gross estate

        Notwithstanding subsection (a), in the case of any qualified 
    joint interest, the value included in the gross estate with respect 
    to such interest by reason of this section is one-half of the value 
    of such qualified joint interest.

                (2) Qualified joint interest defined

        For purposes of paragraph (1), the term ``qualified joint 
    interest'' means any interest in property held by the decedent and 
    the decedent's spouse as--
            (A) tenants by the entirety, or
            (B) joint tenants with right of survivorship, but only if 
        the decedent and the spouse of the decedent are the only joint 
        tenants.

(Aug. 16, 1954, ch. 736, 68A Stat. 385; Pub. L. 87-834, 
Sec. 18(a)(2)(G), Oct. 16, 1962, 76 Stat. 1052; Pub. L. 94-455, title 
XX, Sec. 2002(c)(1), (3), Oct. 4, 1976, 90 Stat. 1855, 1856; Pub. L. 95-
600, title V, Sec. 511(a), title VII, Sec. 702(k)(2), Nov. 6, 1978, 92 
Stat. 2881, 2932; Pub. L. 96-222, title I, Sec. 105(a)(3), Apr. 1, 1980, 
94 Stat. 218; Pub. L. 97-34, title IV, Sec. 403(c)(1)-(3)(A), Aug. 13, 
1981, 95 Stat. 301, 302.)


                               Amendments

    1981--Subsec. (a). Pub. L. 97-34, Sec. 403(c)(2), substituted 
``joint tenants with right of survivorship'' for ``joint tenants'' in 
three places.
    Subsec. (b)(2). Pub. L. 97-34, Sec. 403(c)(1), in redefining 
``qualified joint interest'' substituted provision defining term as 
meaning any interest in property held by the decedent and the decedent's 
spouse as tenants by the entirety, or joint tenants with right of 
survivorship, but only if the decedent and the spouse of the decedent 
are the only joint tenants for provision defining the term as meaning 
any interest in property held by the decedent and the decedent's spouse 
as joint tenants or as tenants by the entirety, but only if such joint 
interest was created by the decedent, the decedent's spouse, or both, in 
the case of personal property, the creation of such joint interest 
constituted in whole or in part a gift for purposes of chapter 12, or in 
the case of real property, an election under section 2515 applies with 
respect to the creation of such joint interest, and in the case of a 
joint tenancy, only the decedent and the decedent's spouse are joint 
tenants.
    Subsecs. (c) to (e). Pub. L. 97-34, Sec. 403(c)(3)(A), repealed 
subsec. (c) respecting value where spouse of decedent materially 
participated in farm or other business, subsec. (d) relating to joint 
interests of husband and wife created before 1977, and subsec. (e) 
covering treatment of certain post-1976 terminations.
    1980--Subsec. (c)(1). Pub. L. 96-222, Sec. 105(a)(3)(B), substituted 
``subsection (a)'' for ``subsections (a)''.
    Subsec. (c)(2)(C). Pub. L. 96-222, Sec. 105(a)(3)(A), added subpar. 
(C).
    1978--Subsec. (c). Pub. L. 95-600, Sec. 511(a), added subsec. (c).
    Subsecs. (d), (e). Pub. L. 95-600, Sec. 702(k)(2), added subsecs. 
(d) and (e).
    1976--Pub. L. 94-455 designated existing provisions as subsec. (a), 
added heading for subsec. (a), and added subsec. (b).
    1962--Pub. L. 87-834 struck out provisions which excepted real 
property outside of the United States.


                    Effective Date of 1981 Amendment

    Amendment by Pub. L. 97-34 applicable to estates of decedents dying 
after Dec. 31, 1981, see section 403(e) of Pub. L. 97-34, set out as a 
note under section 2056 of this title.


                    Effective Date of 1980 Amendment

    Amendment by Pub. L. 96-222 effective, except as otherwise provided, 
as if it had been included in the provisions of the Revenue Act of 1978, 
Pub. L. 95-600, to which such amendment relates, see section 201 of Pub. 
L. 96-222, set out as a note under section 32 of this title.


                    Effective Date of 1978 Amendment

    Section 511(b) of Pub. L. 95-600 provided that: ``The amendment made 
by subsection (a) [amending this section] shall apply with respect to 
estates of decedents dying after December 31, 1978.''


                    Effective Date of 1976 Amendment

    Section 2002(d)(3) of Pub. L. 94-455 provided that: ``The amendment 
made by subsection (c) [amending this section and section 2515 of this 
title] shall apply to joint interests created after December 31, 1976.''


                    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.


   Consideration Given Before July 14, 1988 by Decedent to Noncitizen 
            Spouse Treated as Originally Belonging to Spouse

    Pub. L. 101-239, title VII, Sec. 7815(d)(16), Dec. 19, 1989, 103 
Stat. 2419, as amended by Pub. L. 101-508, title XI, Sec. 11701(l)(3), 
Nov. 5, 1990, 104 Stat. 1388-513, provided that: ``For purposes of 
applying section 2040(a) of the Internal Revenue Code of 1986 with 
respect to any joint interest to which section 2040(b) of such Code does 
not apply solely by reason of section 2056(d)(1)(B) of such Code, any 
consideration furnished before July 14, 1988, by the decedent for such 
interest to the extent treated as a gift to the spouse of the decedent 
for purposes of chapter 12 of such Code (or would have been so treated 
if the donor were a citizen of the United States) shall be treated as 
consideration originally belonging to such spouse and never acquired by 
such spouse from the decedent.''

                  Section Referred to in Other Sections

    This section is referred to in sections 1023, 2045, 2056, 6324 of 
this title.
