§2503 — Taxable gifts
68 cases·18 followed·6 distinguished·2 questioned·3 criticized·1 overruled·38 cited—26% support
Statute Text — 26 U.S.C. §2503
The term “taxable gifts” means the total amount of gifts made during the calendar year, less the deductions provided in subchapter C (section 2522 and following).
In the case of gifts (other than gifts of future interests in property) made to any person by the donor during the calendar year, the first $10,000 of such gifts to such person shall not, for purposes of subsection (a), be included in the total amount of gifts made during such year. Where there has been a transfer to any person of a present interest in property, the possibility that such interest may be diminished by the exercise of a power shall be disregarded in applying this subsection, if no part of such interest will at any time pass to any other person.
In the case of gifts made in a calendar year after 1998, the $10,000 amount contained in paragraph (1) shall be increased by an amount equal to—
$10,000, multiplied by
the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting “calendar year 1997” for “calendar year 2016” in subparagraph (A)(ii) thereof.
If any amount as adjusted under the preceding sentence is not a multiple of $1,000, such amount shall be rounded to the next lowest multiple of $1,000.
No part of a gift to an individual who has not attained the age of 21 years on the date of such transfer shall be considered a gift of a future interest in property for purposes of subsection (b) if the property and the income therefrom—
may be expended by, or for the benefit of, the donee before his attaining the age of 21 years, and
will to the extent not so expended—
pass to the donee on his attaining the age of 21 years, and
in the event the donee dies before attaining the age of 21 years, be payable to the estate of the donee or as he may appoint under a general power of appointment as defined in section 2514(c).
Any qualified transfer shall not be treated as a transfer of property by gift for purposes of this chapter.
For purposes of this subsection, the term “qualified transfer” means any amount paid on behalf of an individual—
as tuition to an educational organization described in section 170(b)(1)(A)(ii) for the education or training of such individual, or
to any person who provides medical care (as defined in section 213(d)) with respect to such individual as payment for such medical care.
If any individual waives, before the death of a participant, any survivor benefit, or right to such benefit, under section 401(a)(11) or 417, such waiver shall not be treated as a transfer of property by gift for purposes of this chapter.
For purposes of this subtitle, any loan of a qualified work of art shall not be treated as a transfer (and the value of such qualified work of art shall be determined as if such loan had not been made) if—
such loan is to an organization described in section 501(c)(3) and exempt from tax under section 501(c) (other than a private foundation), and
the use of such work by such organization is related to the purpose or function constituting the basis for its exemption under section 501.
For purposes of this section—
The term “qualified work of art” means any archaeological, historic, or creative tangible personal property.
The term “private foundation” has the meaning given such term by section 509, except that such term shall not include any private operating foundation (as defined in section 4942(j)(3)).
Treasury Regulations
- Treas. Reg. §Treas. Reg. §25.2503-1 General definitions of “taxable gifts” and of “total amount of gifts.”
- Treas. Reg. §Treas. Reg. §25.2503-2 Exclusions from gifts
- Treas. Reg. §Treas. Reg. §25.2503-2(a) Except as provided in paragraph (f) of this section (involving gifts to a noncitizen spouse), the first $10,000 of gifts made to any one donee during the calendar year 1982 or any calendar year thereafter, except gifts of future interests in property as defined in §§ 25.
- Treas. Reg. §Treas. Reg. §25.2503-2(b) Gifts made after December 31, 1970 and before January 1, 1982.
- Treas. Reg. §Treas. Reg. §25.2503-2(c) Gifts made before January 1, 1971.
- Treas. Reg. §Treas. Reg. §25.2503-2(d) Transitional rule.
- Treas. Reg. §Treas. Reg. §25.2503-2(e) Examples.
- Treas. Reg. §Treas. Reg. §25.2503-2(f) Special rule in the case of gifts made on or after July 14, 1988, to a spouse who is not a United States citizen—(1) In general.
- Treas. Reg. §Treas. Reg. §25.2503-3 Future interests in property
- Treas. Reg. §Treas. Reg. §25.2503-3(a) No part of the value of a gift of a future interest may be excluded in determining the total amount of gifts made during the “calendar period” (as defined in § 25.
- Treas. Reg. §Treas. Reg. §25.2503-3(b) An unrestricted right to the immediate use, possession, or enjoyment of property or the income from property (such as a life estate or term certain) is a present interest in property.
- Treas. Reg. §Treas. Reg. §25.2503-3(c) §25.2503-3(c)
- Treas. Reg. §Treas. Reg. §25.2503-4 Transfer for the benefit of a minor
- Treas. Reg. §Treas. Reg. §25.2503-4(a) §25.2503-4(a)
- Treas. Reg. §Treas. Reg. §25.2503-4(b) Either a power of appointment exercisable by the donee by will or a power of appointment exercisable by the donee during his lifetime will satisfy the conditions set forth in paragraph (a)(3) of this section.
- Treas. Reg. §Treas. Reg. §25.2503-4(c) A gift to a minor which does not satisfy the requirements of section 2503(c) may be either a present or a future interest under the general rules of § 25.
- Treas. Reg. §Treas. Reg. §25.2503-6 Exclusion for certain qualified transfer for tuition or medical expenses
- Treas. Reg. §Treas. Reg. §25.2503-6(a) In general.
- Treas. Reg. §Treas. Reg. §25.2503-6(b) Qualified transfers—(1) Definition.
- Treas. Reg. §Treas. Reg. §25.2503-6(c) Examples.
- Treas. Reg. §Treas. Reg. §25.2503-6(i) §25.2503-6(i)
68 Citing Cases
Tax Court * * * re- flecting [the] estate tax settlement." We are not convinced.
Adjusted taxable gifts include the total amount oftaxable gifts (withinthe meaning ofsection 2503) made by the decedent after 1976, other than gifts which are includible in the gross estate ofthe decedent.
ll treat petitioner’s concession as effective to the extent of $214,941 and $77,550, respectively. (2) Petitioner, in his petition, alleged that the gifts are not taxable only because the applications of the unified credit and annual exclusions, see sec. 2503, reduce his tax liability. Petitioner has not presented any argument regarding these adjustments in his posttrial briefs. We deem petitioner to have conceded that the gifts are taxable gifts, as defined in sec. 2503(a), subject to the annua
ll treat petitioner’s concession as effective to the extent of $214,941 and $77,550, respectively. (2) Petitioner, in his petition, alleged that the gifts are not taxable only because the applications of the unified credit and annual exclusions, see sec. 2503, reduce his tax liability. Petitioner has not presented any argument regarding these adjustments in his posttrial briefs. We deem petitioner to have conceded that the gifts are taxable gifts, as defined in sec. 2503(a), subject to the annua
ll treat petitioner’s concession as effective to the extent of $214,941 and $77,550, respectively. (2) Petitioner, in his petition, alleged that the gifts are not taxable only because the applications of the unified credit and annual exclusions, see sec. 2503, reduce his tax liability. Petitioner has not presented any argument regarding these adjustments in his posttrial briefs. We deem petitioner to have conceded that the gifts are taxable gifts, as defined in sec. 2503(a), subject to the annua
ll treat petitioner’s concession as effective to the extent of $214,941 and $77,550, respectively. (2) Petitioner, in his petition, alleged that the gifts are not taxable only because the applications of the unified credit and annual exclusions, see sec. 2503, reduce his tax liability. Petitioner has not presented any argument regarding these adjustments in his posttrial briefs. We deem petitioner to have conceded that the gifts are taxable gifts, as defined in sec. 2503(a), subject to the annua
We hold the number of exclusions under section 2503 is limited by the number of children in each petitioner's family.
We hold the number of exclusions under section 2503 is limited by the number of children in each petitioner's family.
We hold the number of exclusions under section 2503 is limited by the number of children in each petitioner's family.
We hold the number of exclusions under section 2503 is limited by the number of children in each petitioner's family.
We hold the number of exclusions under section 2503 is limited by the number of children in each petitioner's family.
Thus, lifetime gifts that do not give rise to gift taxes at the time of the gift may increase the net tax due from the estate of the donor by virtue of their being included in the "adjusted taxable gifts" of the estate for purposes of computing the estate tax. The first $10,000 of a gift or gifts made to a donee in a calendar year shall
2503 also enumerates a handful ofexclusions, none ofwhich are relevant in this case. -11- 25.2511-2(b), Gift Tax Regs. The value ofthe property is the price at which it would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of the relevant fact
2503 also enumerates a handful ofexclusions, none ofwhich are relevant in this case. - 10 - The amount ofthe gift is the amount by which the value ofthe property transferred exceeds the value ofconsideration received in money or money's worth. See sec. 2512(b); secs. 25.2511-1(g)(1), 25.2512-8, Gift Tax Regs.; see also Commissionerv. Wemyss,
2503 also enumerates a handful of exclusions, none of which are relevant in this case. Before the enactment gifts made within three years of the donor’s death were merely presumed to be in contemplation of death. See H.R. Rept. No. 94-1380, at 12 (1976), 1976-3 C.B. (Vol. 3) 735, 746. Congress opted for a bright-line test in sec. 2035(b) to en
The term "adjusted taxable gifts" means the total amount of taxable gifts (within the meaning of section 2503) made by the decedent after December 31, 1976, other than gifts which 29Because we conclude that the assets Clyde Sr.
2503 (b) rovides a limited annual exclusion from the gift tax; for 2006 the first $12,000 in gifts to each donee from a donor was not taxable. Sec. 2503(e) (1) and (2) (B) supplements the annual exclusion, treating payments by a donor "to any person who provides medical care * * * with respect to [a donee]" as qu lified transfers. Such qualifi
Regulations promulgated under section 2503 further elucidate this concept of present versus future interest gifts, as follows: Future interests in property.--(a) No part of the value of a gift of a future interest may be excluded in determining the total amount of gifts made during the “calendar period” * * *.
Regulations promulgated under section 2503 further elucidate this concept of present versus future interest gifts, as follows: Future interests in property.--(a) No part of the value of a gift of a future interest may be excluded in determining the total amount of gifts made during the “calendar period” * * *.
n in money or money’s worth, then the amount by which the value of the property exceeded the value of the consideration shall be deemed a gift”. The tax is then computed based upon the statutorily defined “taxable gifts”, which term is explicated in section 2503. Section 2503(a) states generally that taxable gifts means the total amount of gifts made during the calendar year, less specified deductions. Similarly, the Internal Revenue Code imposes a Federal tax “on the transfer of the taxable est
he transfer is in trust or otherwise, whether the gift is direct or indirect, and whether the property is real or personal, tangible or intangible”. The tax is computed based upon the statutorily defined “taxable gifts”, which term is explicated in section 2503. Section 2503(a) provides generally that taxable gifts means the total amount of gifts made during the calendar year, less specified deductions. Section 2503(b), however, excludes from taxable gifts the first $10,000 “of gifts (other than
The term "adjusted taxable gifts" means the total amount of the taxable gifts (within the meaning of section 2503) made by the decedent after December 31, 1976, other than gifts which are includable in the gross estate.
Since there is no - 24 - dispute that the below-market rent is a taxable gift under section 2503, respondent is sustained on this issue.10 III.
For purposes of paragraph (1)(B), the term “adjusted taxable gifts” means the total amount of the taxable gifts (within the meaning of section 2503) made by the decedent after December 31, 1976, other than gifts which are includible in the gross estate of the decedent.
The term "adjusted taxable gifts" means the total amount of the taxable gifts (within the meaning of section 2503) made by the decedent after December 31, 1976, other than gifts which are - 11 - includable in the gross estate.
Respondent further determined that decedent thereby made indirect gifts of the investment income to the children, which gifts are "taxable gifts" for purposes of section 2503 and the other estate and gift tax provisions of the Code.
The term "adjusted taxable gifts" means the total amount of taxable gifts (within the meaning of section 2503) made by a decedent after December 31, 1976, other than gifts which are included in the gross estate of the decedent.
They used the annual per donee exclusions from gifts (section 2503), and the gift splitting provisions (section 2513) in each of those years, and the unified credit (section 2010) in 1983-86.