§2055 — Transfers for public, charitable, and religious uses
95 cases·16 followed·19 distinguished·60 cited—17% support
Statute Text — 26 U.S.C. §2055
For purposes of the tax imposed by section 2001, the value of the taxable estate shall be determined by deducting from the value of the gross estate the amount of all bequests, legacies, devises, or transfers—
to or for the use of the United States, any State, any political subdivision thereof, or the District of Columbia, for exclusively public purposes;
to or for the use of any corporation organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, including the encouragement of art, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), and the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private stockholder or individual, which is not disqualified for tax exemption under section 501(c)(3) by reason of attempting to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office;
to a trustee or trustees, or a fraternal society, order, or association operating under the lodge system, but only if such contributions or gifts are to be used by such trustee or trustees, or by such fraternal society, order, or association, exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, such trust, fraternal society, order, or association would not be disqualified for tax exemption under section 501(c)(3) by reason of attempting to influence legislation, and such trustee or trustees, or such fraternal society, order, or association, does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office;
to or for the use of any veterans’ organization incorporated by Act of Congress, or of its departments or local chapters or posts, no part of the net earnings of which inures to the benefit of any private shareholder or individual; or
to an employee stock ownership plan if such transfer qualifies as a qualified gratuitous transfer of qualified employer securities within the meaning of section 664(g).
For purposes of this subsection, the complete termination before the date prescribed for the filing of the estate tax return of a power to consume, invade, or appropriate property for the benefit of an individual before such power has been exercised by reason of the death of such individual or for any other reason shall be considered and deemed to be a qualified disclaimer with the same full force and effect as though he had filed such qualified disclaimer. Rules similar to the rules of section 501(j) shall apply for purposes of paragraph (2).
Property includible in the decedent’s gross estate under section 2041 (relating to powers of appointment) received by a donee described in this section shall, for purposes of this section, be considered a bequest of such decedent.
If the tax imposed by section 2001, or any estate, succession, legacy, or inheritance taxes, are, either by the terms of the will, by the law of the jurisdiction under which the estate is administered, or by the law of the jurisdiction imposing the particular tax, payable in whole or in part out of the bequests, legacies, or devises otherwise deductible under this section, then the amount deductible under this section shall be the amount of such bequests, legacies, or devises reduced by the amount of such taxes.
The amount of the deduction under this section for any transfer shall not exceed the value of the transferred property required to be included in the gross estate.
No deduction shall be allowed under this section for a transfer to or for the use of an organization or trust described in section 508(d) or 4948(c)(4) subject to the conditions specified in such sections.
Where an interest in property (other than an interest described in section 170(f)(3)(B)) passes or has passed from the decedent to a person, or for a use, described in subsection (a), and an interest (other than an interest which is extinguished upon the decedent’s death) in the same property passes or has passed (for less than an adequate and full consideration in money or money’s worth) from the decedent to a person, or for a use, not described in subsection (a), no deduction shall be allowed under this section for the interest which passes or has passed to the person, or for the use, described in subsection (a) unless—
in the case of a remainder interest, such interest is in a trust which is a charitable remainder annuity trust or a charitable remainder unitrust (described in section 664) or a pooled income fund (described in section 642(c)(5)), or
in the case of any other interest, such interest is in the form of a guaranteed annuity or is a fixed percentage distributed yearly of the fair market value of the property (to be determined yearly).
A deduction shall be allowed under subsection (a) in respect of any qualified reformation.
For purposes of this paragraph, the term “qualified reformation” means a change of a governing instrument by reformation, amendment, construction, or otherwise which changes a reformable interest into a qualified interest but only if—
any difference between—
the actuarial value (determined as of the date of the decedent’s death) of the qualified interest, and
the actuarial value (as so determined) of the reformable interest,
does not exceed 5 percent of the actuarial value (as so determined) of the reformable interest,
in the case of—
a charitable remainder interest, the nonremainder interest (before and after the qualified reformation) terminated at the same time, or
any other interest, the reformable interest and the qualified interest are for the same period, and
such change is effective as of the date of the decedent’s death.
A nonremainder interest (before reformation) for a term of years in excess of 20 years shall be treated as satisfying subclause (I) of clause (ii) if such interest (after reformation) is for a term of 20 years.
For purposes of this paragraph—
The term “reformable interest” means any interest for which a deduction would be allowable under subsection (a) at the time of the decedent’s death but for paragraph (2).
The term “reformable interest” does not include any interest unless, before the remainder vests in possession, all payments to persons other than an organization described in subsection (a) are expressed either in specified dollar amounts or a fixed percentage of the fair market value of the property. For purposes of determining whether all such payments are expressed as a fixed percentage of the fair market value of the property, section 664(d)(3) shall be taken into account.
Clause (ii) shall not apply to any interest if a judicial proceeding is commenced to change such interest into a qualified interest not later than the 90th day after—
if an estate tax return is required to be filed, the last date (including extensions) for filing such return, or
if no estate tax return is required to be filed, the last date (including extensions) for filing the income tax return for the 1st taxable year for which such a return is required to be filed by the trust.
In the case of any interest passing under a will executed before
January 1, 1979
, or under a trust created before such date, clause (ii) shall not apply.
For purposes of this paragraph, the term “qualified interest” means an interest for which a deduction is allowable under subsection (a).
The deduction referred to in subparagraph (A) shall not exceed the amount of the deduction which would have been allowable for the reformable interest but for paragraph (2).
If (by reason of the death of any individual, or by termination or distribution of a trust in accordance with the terms of the trust instrument) by the due date for filing the estate tax return (including any extension thereof) a reformable interest is in a wholly charitable trust or passes directly to a person or for a use described in subsection (a), a deduction shall be allowed for such reformable interest as if it had met the requirements of paragraph (2) on the date of the decedent’s death. For purposes of the preceding sentence, the term “wholly charitable trust” means a charitable trust which, upon the allowance of a deduction, would be described in section 4947(a)(1).
The period for assessing any deficiency of any tax attributable to the application of this paragraph shall not expire before the date 1 year after the date on which the Secretary is notified that such reformation (or other proceeding pursuant to subparagraph (J)) has occurred.
The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this paragraph, including regulations providing such adjustments in the application of the provisions of section 508 (relating to special rules relating to section 501(c)(3) organizations), subchapter J (relating to estates, trusts, beneficiaries, and decedents), and chapter 42 (relating to private foundations) as may be necessary by reason of the qualified reformation.
The Secretary shall prescribe regulations (consistent with the provisions of this paragraph) permitting reformations in the case of any failure—
to meet the requirements of section 170(f)(3)(B) (relating to remainder interests in personal residence or farm, etc.), or
to meet the requirements of section 642(c)(5).
In the case of a trust that would qualify (or could be reformed to qualify pursuant to subparagraph (B)) but for failure to satisfy the requirement of paragraph (1)(D) or (2)(D) of section 664(d), such trust may be—
declared null and void ab initio, or
changed by reformation, amendment, or otherwise to meet such requirement by reducing the payout rate or the duration (or both) of any noncharitable beneficiary’s interest to the extent necessary to satisfy such requirement,
pursuant to a proceeding that is commenced within the period required in subparagraph (C)(iii). In a case described in clause (i), no deduction shall be allowed under this title for any transfer to the trust and any transactions entered into by the trust prior to being declared void shall be treated as entered into by the transferor.
In the case of a qualified contribution of a work of art, the work of art and the copyright on such work of art shall be treated as separate properties for purposes of paragraph (2).
For purposes of this paragraph, the term “work of art” means any tangible personal property with respect to which there is a copyright under Federal law.
For purposes of this paragraph, the term “qualified contribution” means any transfer of property to a qualified organization if the use of the property by the organization is related to the purpose or function constituting the basis for its exemption under section 501.
For purposes of this paragraph, the term “qualified organization” means any organization described in section 501(c)(3) other than a private foundation (as defined in section 509). For purposes of the preceding sentence, a private operating foundation (as defined in section 4942(j)(3)) shall not be treated as a private foundation.
A deduction otherwise allowed under subsection (a) for any contribution to a donor advised fund (as defined in section 4966(d)(2)) shall only be allowed if—
the sponsoring organization (as defined in section 4966(d)(1)) with respect to such donor advised fund is not—
described in paragraph (3) or (4) of subsection (a), or
a type III supporting organization (as defined in section 4943(f)(5)(A)) which is not a functionally integrated type III supporting organization (as defined in section 4943(f)(5)(B)), and
the taxpayer obtains a contemporaneous written acknowledgment (determined under rules similar to the rules of section 170(f)(8)(C)) from the sponsoring organization (as so defined) of such donor advised fund that such organization has exclusive legal control over the assets contributed.
A deduction shall be allowed under subsection (a) in respect of any transfer of a qualified real property interest (as defined in section 170(h)(2)(C)) which meets the requirements of section 170(h) (without regard to paragraph (4)(A) thereof).
For option as to time for valuation for purpose of deduction under this section, see section 2032.
For treatment of certain organizations providing child care, see section 501(k).
For exemption of gifts and bequests to or for the benefit of Library of Congress, see
section 5 of the Act of March 3, 1925
, as amended (
2 U.S.C. 161
).
For treatment of gifts and bequests for the benefit of the Naval Historical Center as gifts or bequests to or for the use of the United States, see
section 8622 of title 10
, United States Code.
For treatment of gifts and bequests to or for the benefit of National Park Foundation as gifts or bequests to or for the use of the United States, see
section 8 of the Act of December 18, 1967
(
16 U.S.C. 191
).
For treatment of gifts, devises, or bequests accepted by the Secretary of State, the Director of the International Communication Agency, or the Director of the United States International Development Cooperation Agency as gifts, devises, or bequests to or for the use of the United States, see section 25 of the State Department Basic Authorities Act of 1956.
For treatment of gifts or bequests of money accepted by the Attorney General for credit to “Commissary Funds, Federal Prisons,” as gifts or bequests to or for the use of the United States, see
section 4043 of title 18
, United States Code.
For payment of tax on gifts and bequests of United States obligations to the United States, see
section 3113(e) of title 31
, United States Code.
For treatment of gifts and bequests for benefit of the Naval Academy as gifts or bequests to or for the use of the United States, see
section 8473 of title 10
, United States Code.
For treatment of gifts and bequests for benefit of the Naval Academy Museum as gifts or bequests to or for the use of the United States, see
section 8474 of title 10
, United States Code.
For exemption of gifts and bequests received by National Archives Trust Fund Board, see
section 2308 of title 44
, United States Code.
For treatment of gifts and bequests to or for the use of Indian tribal governments (or their subdivisions), see section 7871.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §20.2055-1 Deduction for transfers for public, charitable, and religious uses; in general
- Treas. Reg. §Treas. Reg. §20.2055-1(a) General rule.
- Treas. Reg. §Treas. Reg. §20.2055-1(b) Powers of appointment—(1) General rule.
- Treas. Reg. §Treas. Reg. §20.2055-1(c) Submission of evidence.
- Treas. Reg. §Treas. Reg. §20.2055-1(d) Cross references.
- Treas. Reg. §Treas. Reg. §20.2055-2 Transfers not exclusively for charitable purposes
- Treas. Reg. §Treas. Reg. §20.2055-2(a) §20.2055-2(a)
- Treas. Reg. §Treas. Reg. §20.2055-2(b) §20.2055-2(b)
- Treas. Reg. §Treas. Reg. §20.2055-2(c) If no dispositive provision of the instrument governing the disposition of the property is amended by the decedent after October 9, 1969, and before October 9, 1972, and the decedent is on October 9, 1972, and at all times thereafter under a mental disability (as defined in § 1.
- Treas. Reg. §Treas. Reg. §20.2055-2(d) Where a charitable interest in the form of a unitrust interest is in trust, the governing instrument of the trust may provide that income of the trust which is in excess of the amount required to pay the unitrust interest shall be paid to or for the use of a charity.
- Treas. Reg. §Treas. Reg. §20.2055-2(e) Where a charitable interest in the form of a unitrust interest is in trust, the charitable interest generally is not a unitrust interest if any amount may be paid by the trust for a private purpose before the expiration of all the charitable unitrust interests.
- Treas. Reg. §Treas. Reg. §20.2055-2(f) Valuation of charitable interest—(1) In general.
- Treas. Reg. §Treas. Reg. §20.2055-2(g) §20.2055-2(g)
- Treas. Reg. §Treas. Reg. §20.2055-2(h) For purposes of this subdivision (vi) and paragraph (f) of this section, the term “appropriate valuation date” means the date of death or the alternate valuation date determined pursuant to an election under section 2032.
- Treas. Reg. §Treas. Reg. §20.2055-2(i) The present value of a remainder interest in a charitable remainder annuity trust is to be determined under § 1.
- Treas. Reg. §Treas. Reg. §20.2055-2(v) The present value of a unitrust interest described in paragraph (e)(2)(vii) of this section is to be determined by subtracting the present value of all interests in the transferred property other than the unitrust interest from the fair market value of the transferred property.
- Treas. Reg. §Treas. Reg. §20.2055-3 Effect of death taxes and administration expenses
- Treas. Reg. §Treas. Reg. §20.2055-3(a) Death taxes.
- Treas. Reg. §Treas. Reg. §20.2055-3(b) Administration expenses—(1) Definitions—(i) Management expenses.
- Treas. Reg. §Treas. Reg. §20.2055-4 Disallowance of charitable, etc., deductions because of “prohibited transactions” in the case of decedents dying before January 1, 1970
- Treas. Reg. §Treas. Reg. §20.2055-4(a) Sections 503(e) and 681(b)(5) provides that no deduction which would otherwise be allowable under section 2055 for the value of property transferred by the decedent during his lifetime or by will for religious, charitable, scientific, literary, or educational purposes (including the encouragement of art and the prevention of cruelty to children or animals) is allowed if (1) the transfer is made in trust, and, for income tax purposes for the taxable year of the trust in which the transfer is made
- Treas. Reg. §Treas. Reg. §20.2055-4(b) For purposes of section 681(b)(5) and section 503(e), the term “transfer” includes any gift, contribution, bequest, devise, legacy, or other disposition.
- Treas. Reg. §Treas. Reg. §20.2055-4(c) The income tax regulations contain the rules for the determination of the taxable year of the trust for which the deduction under section 642(c) is limited by section 681(b) and for the determination of the taxable year of the organization for which an exemption is denied under section 503(a).
- Treas. Reg. §Treas. Reg. §20.2055-4(d) This section applies only in the case of decedents dying before January 1, 1970.
- Treas. Reg. §Treas. Reg. §20.2055-5 Disallowance of charitable, etc., deductions in the case of decedents dying after December 31, 1969
95 Citing Cases
Section 2055 provides a charitable contribution deduction for amounts transferred by a decedent for qualified charitable and religious uses.
Section 2055 provides a charitable contribution deduction for amounts transferred by a decedent for qualified charitable and religious uses.
ice of deficiency was issued on September 18, 2003, in which respondent determined that the charitable contribution deduction claimed by the estate for the remainder interest should be disallowed because the trust did not satisfy the requirements of section 2055. During August 2002, certain of the interested parties made various efforts to reform the trust. Mr. Carlile and the diocese each prepared revised versions of the trust's governing instrument, but neither version was ever executed by the
Petitioner maintains that the estate qualifies for a charitable deduction under section 2055 and that it is entitled to a refund because a greater charitable deduction should have 1(...continued) death, and all Rule references are to the Tax Court Rules of Practice and Procedure.
Petitioner maintains that the estate qualifies for a charitable deduction under section 2055 and that it is entitled to a refund because a greater charitable deduction should have been allowed in light of the revised actuarial values for Birchfield’s annuity.
471, respondent ruled that an estate may deduct under section 2055 a decedent’s bequest of the residue of his estate to a charity under certain conditions.
Commissioner, supra, stating: Our decision in Estate of Belcher was based on the special characteristics of charitable contributions, including the possibility that the estate would receive an offsetting deduction under section 2055 if the funds represented by the checks were included in the gross estate (83 T.C.
However, it does not necessarily follow that the estate will automatically be entitled to a deduction under section 2055 simply because property originally included in the gross estate is transferred by the estate fiduciaries to a qualifying organization during the period of estate administration.
Section 2055 provides in relevant part: (a) In General.--For purposes of the tax imposed by section 2001, the value of the taxable estate shall be determined by deducting from the value of the gross estate the amount of all bequests, legacies, devises, or transfers-- - 7 - (1) to or for the use of the United States, any State, any political subdiv
§ 2055, and (2) the value of property passing from a decedent to her surviving spouse, I.R.C. § 2056; see also Estate of Anenberg v. Commissioner, 162 T.C. 199, 206 (2024) (“The marital deduction does 6 [*6] not eliminate or reduce the tax on the transfer of marital assets out of the marital unit, but instead permits deferral until the death of or
In these cases, the estate and the Commissioner disagree about whetherthe estate is entitled to a charitable deduction for the additional amount that the Irrevocable Trust may be required to transfer to the Living Trust after Moore's death. They also disagree about whether the attorney's fees claimed on Moore's estate tax return were act
In these cases, the estate and the Commissioner disagree about whetherthe estate is entitled to a charitable deduction for the additional amount that the Irrevocable Trust may be required to transfer to the Living Trust after Moore's death. They also disagree about whether the attorney's fees claimed on Moore's estate tax return were act
Deduction From Value ofGross Estate--Section 2055 In general, a deduction for bequests made to charitable organizations is a type ofapplicable deduction allowed in calculating a decedent's taxable estate.
Decedent's Will Decedent's will provides that his descendants inherit his personal and household effects, which.included his undivided fractional ownership interests in.
d fractional ownership interests in the art. Decedent’s residuary estate passed to the James A. Elkins, Jr. and Margaret W. Elkins Family Foundation (Elkins Foundation), a bequest that entitles the estate to a charitable contribution deduction under section 2055. The will provides that all estate taxes, plus any interest and penalties, due by reason of decedent’s death (but not including taxes due with respect to the assets in Mrs. Elkins’ marital trust includable in decedent’s gross estate unde
e interest is created by operation of a disclaimer,13 as it was in this case, section 20 .2055-2(c)(1) of the estate tax regulations tells us to look to the disclaimer rules : "The amount of a * * * transfer for which a deduction is allowable under section 2055 includes an interest which falls into the bequest, devise or transfer as the result of * * * (i) A qualified disclaimer (see section 2518 and the corresponding regulations for rules relating to a qualified disclaimer) ." Because Hamilton'
n the interest is created by operation of a disclaimer, as it was in this case, section 20.2055-2(c)(1) of the estate tax regulations tells us to look to the disclaimer rules: “The amount of a * * * transfer for which a deduction is allowable under section 2055 includes an interest which falls into the bequest, devise or transfer as the result of * * * (i) A qualified disclaimer (see section 2518 and the corresponding regulations for rules relating to a qualified disclaimer).” Because Hamilton’s
The Internal Revenue Service has adopted this position, as follows: “A deduction is allowable under section 2055 of the Code with respect to a transfer of property to a foreign government or political subdivision thereof for exclusively charitable purposes.” Rev.
407, 1415-1416 (1970) (bequest to Canadian foundation to be used for the benefit of Canadian students attending college in the United States). 5 Further, the regulations direct us to compute the deduction in the same manner as the one allowed under sec. 2055. Sec. 20.2106-1(a)(2), Estate Tax Regs. A deduction is allowed from the gross estate of a decedent under sec. 2055(a) “for the value of property included in the decedent’s gross estate and transferred by the decedent during his lifetime or b
Article THIRD gives one-half of the “rest, residue and remainder” of decedent’s property to the Lubin-Green Foundation, which is a charity for purposes of section 2055.2 Article FOURTH gives the other one-half of the “rest, residue and remainder” of decedent’s property in trust for her grandchildren.
. 1407, 1415-1416 (1970) (bequest to Canadian foundation to be used for the benefit of Canadian students attending college in the United States). Further, the regulations direct us to compute the deduction in the same manner as the one allowed under sec. 2055. Sec. 20.2106-l(a)(2), Estate Tax Regs. A deduction is allowed from the gross estate of a decedent under sec. 2055(a) “for the value of property included in the decedent’s gross estate and transferred by the decedent during his lifetime or
The Internal Revenue Service has adopted this position, as follows: “A deduction is allowable under section 2055 of the Code with respect to a transfer of property to a foreign government or political subdivision thereof for exclusively charitable purposes.” Rev.
Constitution; (4) whether section 2035(c) violates the equal protection requirements of the Fourteenth Amendment, as embodied in the Fifth Amendment; and (5) whether the estate may deduct under section 2055 Federal gift taxes paid on gifts that decedent made in 1991 and 1992.
Claimed Deduction Under Section 2055 for Gift Taxes Paid Section 2055(a) permits a deduction from the gross estate for “the amount of all bequests, legacies, devises, or transfers * * * to or for the use of the United States * * * for exclusively public purposes”.
As a general rule, section 2055 permits a deduction for the value of bequests to charitable entities but limits the amount of such deduction to “the value of the transferred property required to be included in the gross estate.” Sec.
- 25 - Section 2055 allows a deduction in computing the taxable estate for certain transfers for charitable or similar purposes. In pertinent part, section 2055(a)(3) allows a deduction for bequests to: a fraternal society, order, or association operating under the lodge system, but only if such contributions or gifts are to be used * * * exclusively for
471, respondent ruled that an estate may deduct under section 2055 a decedent’s bequest of the residue of his estate to a charity under certain conditions.
Section 2055 allows a deduction for certain transfers for public, charitable, or religious uses. Section 2056 allows a deduction for certain bequests to a surviving spouse. Nowhere in the Code or regulations thereunder does it say that an estate's underpayment is based solely on deductions that appear on its estate tax return. Respondent reaches th
However, those cases stand for the narrow proposition that a charitable gift that is voidable by the decedent's heirs, but that is not avoided, "is not regarded as creating a contingency that fails the 'so remote as to be negligible' test of the regulations under section 2055." Longue Vue Found.
Section 2055 allows a deduction for certain transfers for public, charitable, or religious uses. Section 2056 allows a deduction for certain bequests to a surviving spouse. Nowhere does the Code or regulations thereunder say that an estate’s underpayment is based solely on deductions that appear on its estate tax return. Respondent reaches this res
Commissioner, supra, stating: Our decision in Estate of Belcher was based on the special characteristics of charitable contributions, including the possibility that the estate would receive an offsetting deduction under section 2055 if the funds represented by the checks were included in the gross estate (83 T.C.