---
kind: "range"
citation: "26 U.S.C. §§ 2035–2038"
title: "26"
from: "2035"
to: "2038"
count: 4
release: "119-102"
url: "https://uscodex.org/usc/26/2035..2038"
---

# §2035. Adjustments for certain gifts made within 3 years of decedent’s death

- (a) **Inclusion of certain property in gross estate—** If—
  - (1) the decedent made a transfer (by trust or otherwise) of an interest in any property, or relinquished a power with respect to any property, during the 3-year period ending on the date of the decedent’s death, and
  - (2) the value of such property (or an interest therein) would have been included in the decedent’s gross estate under section [2036](/usc/26/2036.md), [2037](/usc/26/2037.md), [2038](/usc/26/2038.md), or [2042](/usc/26/2042.md) if such transferred interest or relinquished power had been retained by the decedent on the date of his death,

  the value of the gross estate shall include the value of any property (or interest therein) which would have been so included.

- (b) **Inclusion of gift tax on gifts made during 3 years before decedent’s death—** The amount of the gross estate (determined without regard to this subsection) shall be increased by the amount of any tax paid under [chapter 12](/usc/26/chstB-ch12.md) by the decedent or his estate on any gift made by the decedent or his spouse during the 3-year period ending on the date of the decedent’s death.
- (c) **Other rules relating to transfers within 3 years of death—**
  - (1) **In general—** For purposes of—
    - (A) [section 303(b)](/usc/26/303.md?p=b) (relating to distributions in redemption of [stock](/usc/26/7701.md?p=a-7) to pay death taxes),
    - (B) [section 2032A](/usc/26/2032A.md) (relating to special valuation of certain farms, etc., real property), and
    - (C) subchapter C of [chapter 64](/usc/26/chstF-ch64.md) (relating to lien for taxes),

    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 made a transfer, by trust or otherwise, during the 3-year period ending on the date of the decedent’s death.

  - (2) **Coordination with section 6166—** An estate shall be treated as meeting the 35 percent of adjusted gross estate requirement of [section 6166(a)(1)](/usc/26/6166.md?p=a-1) only if the estate meets such requirement both with and without the application of [subsection (a)](#a).
  - (3) **Marital and small transfers—** [Paragraph (1)](#c-1) shall not apply to any transfer (other than a transfer with respect to a life insurance policy) made during a calendar year to any donee if the decedent was not required by [section 6019](/usc/26/6019.md) (other than by reason of [section 6019(2)](/usc/26/6019.md?p=2)) to file any gift tax [return](/usc/26/6103.md?p=b-1) for such year with respect to transfers to such donee.
- (d) **Exception—** [Subsection (a)](#a) and [paragraph (1)](#c-1) of subsection (c) shall not apply to any bona fide sale for an adequate and full consideration in money or money’s worth.
- (e) **Treatment of certain transfers from revocable trusts—** For purposes of this section and [section 2038](/usc/26/2038.md), any transfer from any portion of a trust during any period that such portion was treated under [section 676](/usc/26/676.md) as owned by the decedent by reason of a power in the grantor (determined without regard to [section 672(e)](/usc/26/672.md?p=e)) shall be treated as a transfer made directly by the decedent.

# §2036. Transfers with retained life estate

- (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 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, under which he has retained for his life or for any period not ascertainable without reference to his death or for any period which does not in fact end before his death—
  - (1) the possession or enjoyment of, or the right to the income from, the property, or
  - (2) the right, either alone or in conjunction with any [person](/usc/26/7701.md?p=a-1), to designate the [persons](/usc/26/7701.md?p=a-1) who shall possess or enjoy the property or the income therefrom.
- (b) **Voting rights—**
  - (1) **In general—** For purposes of [subsection (a)(1)](#a-1), the retention of the right to vote (directly or indirectly) shares of [stock](/usc/26/7701.md?p=a-7) of a controlled [corporation](/usc/26/7701.md?p=a-3) shall be considered to be a retention of the enjoyment of transferred property.
  - (2) **Controlled corporation—** For purposes of [paragraph (1)](#b-1), a [corporation](/usc/26/7701.md?p=a-3) shall be treated as a controlled [corporation](/usc/26/7701.md?p=a-3) if, at any time after the transfer of the property and during the 3-year period ending on the date of the decedent’s death, the decedent owned (with the application of [section 318](/usc/26/318.md)), or had the right (either alone or in conjunction with any [person](/usc/26/7701.md?p=a-1)) to vote, [stock](/usc/26/7701.md?p=a-7) possessing at least 20 percent of the total combined voting power of all classes of [stock](/usc/26/7701.md?p=a-7).
  - (3) **Coordination with section 2035—** For purposes of applying [section 2035](/usc/26/2035.md) with respect to [paragraph (1)](#b-1), the relinquishment or cessation of voting rights shall be treated as a transfer of property made by the decedent.
- (c) **Limitation on application of general rule—** This section shall not apply to a transfer made before March 4, 1931; nor to a transfer made after March 3, 1931, and before June 7, 1932, unless the property transferred would have been includible in the decedent’s gross estate by reason of the amendatory language of the joint resolution of March 3, 1931 (46 Stat. 1516).

# §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](#b) in the property (but in the case of a transfer made before October 8, 1949, only if such [reversionary interest](#b) arose by the express terms of the instrument of transfer), and the value of such [reversionary interest](#b) 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](/usc/26/7701.md?p=c) a possibility that property transferred by the decedent—
  - (1) may [return](/usc/26/6103.md?p=b-1) 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](/usc/26/6103.md?p=b-1) 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](/usc/26/7701.md?p=c) the use of tables of mortality and actuarial principles, under regulations prescribed by the [Secretary](/usc/26/7701.md?p=a-11-B). 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](/usc/26/6103.md?p=b-1) 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](/usc/26/2041.md)) which in fact was exercisable immediately before the decedent’s death.


# §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](/usc/26/7701.md?p=a-1) (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](/usc/26/7701.md?p=a-1), 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)](#a-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.