I.R.C. § 2031(a) General —
The value of the gross estate of the decedent shall be determined by including to
the extent provided for in this part, the value at the time of his death of all property,
real or personal, tangible or intangible, wherever situated.
I.R.C. § 2031(b) Valuation Of Unlisted Stock And Securities —
In the case of stock and securities of a corporation the value of which, by reason
of their not being listed on an exchange and by reason of the absence of sales thereof,
cannot be determined with reference to bid and asked prices or with reference to
sales prices, the value thereof shall be determined by taking into consideration,
in addition to all other factors, the value of stock or securities of corporations
engaged in the same or a similar line of business which are listed on an exchange.
I.R.C. § 2031(c) Estate Tax With Respect To Land Subject To A Qualified Conservation Easement
I.R.C. § 2031(c)(1) In General —
If the executor makes the election described in paragraph (6), then, except as otherwise provided in this subsection, there shall be excluded
from the gross estate the lesser of—
I.R.C. § 2031(c)(1)(A) —
the applicable percentage of the value of land subject to a qualified conservation
easement, reduced by the amount of any deduction under section 2055(f) with respect to such land, or
I.R.C. § 2031(c)(1)(B) —
$500,000.
I.R.C. § 2031(c)(2) Applicable Percentage —
For purposes of paragraph (1), the term “applicable percentage” means 40 percent reduced (but not below zero)
by 2 percentage points for each percentage point (or fraction thereof)
by which the value of the qualified conservation easement is less than 30 percent
of the value of the land (determined without regard to the value of such easement
and reduced by the value of any retained development right (as defined in paragraph
(5))). The values taken into account under the preceding sentence shall be such values
as of the date of the contribution referred to in paragraph (8)(B).
I.R.C. § 2031(c)(3) Exclusion Limitation —
[Repealed. Pub. L. 113-295, Div. A, title II, Sec. 221(a)(96).]
I.R.C. § 2031(c)(4) Treatment Of Certain Indebtedness
I.R.C. § 2031(c)(4)(A) In General —
The exclusion provided in paragraph (1) shall not apply to the extent that the land is debt-financed property.
I.R.C. § 2031(c)(4)(B) Definitions —
For purposes of this paragraph—
I.R.C. § 2031(c)(4)(B)(i) Debt-Financed Property —
The term “debt-financed property” means any property with respect to which there
is an acquisition indebtedness
(as defined in clause (ii))
on the date of the decedent's death.
I.R.C. § 2031(c)(4)(B)(ii) Acquisition Indebtedness —
The term “acquisition indebtedness” means, with respect to debt-financed property,
the unpaid amount of—
I.R.C. § 2031(c)(4)(B)(ii)(I) —
the indebtedness incurred by the donor in acquiring such property,
I.R.C. § 2031(c)(4)(B)(ii)(II) —
the indebtedness incurred before the acquisition of such property if such indebtedness
would not have been incurred but for such acquisition,
I.R.C. § 2031(c)(4)(B)(ii)(III) —
the indebtedness incurred after the acquisition of such property if such indebtedness
would not have been incurred but for such acquisition and the incurrence of such
indebtedness was reasonably foreseeable at the time of such acquisition, and
I.R.C. § 2031(c)(4)(B)(ii)(IV) —
the extension, renewal, or refinancing of an acquisition indebtedness.
I.R.C. § 2031(c)(5) Treatment Of Retained Development Right
I.R.C. § 2031(c)(5)(A) In General —
Paragraph (1) shall not apply to the value of any development right retained by the donor in the
conveyance of a qualified conservation easement.
I.R.C. § 2031(c)(5)(B) Termination Of Retained Development Right —
If every person in being who has an interest (whether or not in possession) in the
land executes an agreement to extinguish permanently some or all of any development
rights (as defined in subparagraph (D))
retained by the donor on or before the date for filing the return of the tax imposed
by section 2001, then any tax imposed by section 2001 shall be reduced accordingly. Such agreement shall be filed with the return of the
tax imposed by section 2001. The agreement shall be in such form as the Secretary shall prescribe.
I.R.C. § 2031(c)(5)(C) Additional Tax —
Any failure to implement the agreement described in subparagraph (B) not later than the earlier of—
I.R.C. § 2031(c)(5)(C)(i) —
the date which is 2 years after the date of the decedent's death, or
I.R.C. § 2031(c)(5)(C)(ii) —
the date of the sale of such land subject to the qualified conservation easement,
shall result in the imposition of an additional tax in the amount of the tax which
would have been due on the retained
development rights subject to such agreement. Such additional tax shall be due and
payable on the last day of the 6th month following such date.
I.R.C. § 2031(c)(5)(D) Development Right Defined —
For purposes of this paragraph, the term “development right” means any right to
use the land subject to the qualified conservation easement in which such right is
retained for any commercial purpose which is not subordinate to and directly supportive
of the use of such land as a farm for farming purposes (within the meaning of section
2032A(e)(5)).
I.R.C. § 2031(c)(6) Election —
The election under this subsection shall be made on or before the due date (including
extensions) for filing the return of tax imposed by section 2001 and shall be made on such return.
I.R.C. § 2031(c)(7) Calculation Of Estate Tax Due —
An executor making the election described in paragraph (6) shall, for purposes of calculating the amount of tax imposed by section 2001, include the value of any development right (as defined in paragraph (5)) retained by the donor in the conveyance of such qualified conservation easement.
The computation of tax on any retained development right prescribed in this paragraph
shall be done in such manner and on such forms as the Secretary shall prescribe.
I.R.C. § 2031(c)(8) Definitions —
For purposes of this subsection—
I.R.C. § 2031(c)(8)(A) Land Subject To A Qualified Conservation Easement —
The term “land subject to a qualified conservation easement” means land—
I.R.C. § 2031(c)(8)(A)(i) —
which is located in the United States or any possession of the United States,
I.R.C. § 2031(c)(8)(A)(ii) —
which was owned by the decedent or a member of the decedent's family at all times
during the 3-year period ending on the date of the decedent's death, and
I.R.C. § 2031(c)(8)(A)(iii) —
with respect to which a qualified conservation easement has been made by an individual
described in subparagraph (C), as of the date of the election described in paragraph
(6).
I.R.C. § 2031(c)(8)(B) Qualified Conservation Easement —
The term “qualified conservation easement”
means a qualified conservation contribution (as defined in section 170(h)(1)) of a qualified real property interest (as defined in section 170(h)(2)(C)), except that clause (iv) of section 170(h)(4)(A) shall not apply, and the restriction on the use of such interest described in section
170(h)(2)(C) shall include a prohibition on more than a de minimis use for a commercial recreational
activity.
I.R.C. § 2031(c)(8)(C) Individual Described —
An individual is described in this subparagraph if such individual is—
I.R.C. § 2031(c)(8)(C)(i) —
the decedent,
I.R.C. § 2031(c)(8)(C)(ii) —
a member of the decedent's family,
I.R.C. § 2031(c)(8)(C)(iii) —
the executor of the decedent's estate, or
I.R.C. § 2031(c)(8)(C)(iv) —
the trustee of a trust the corpus of which includes the land to be subject to the
qualified conservation
easement.
I.R.C. § 2031(c)(8)(D) Member Of Family —
The term “member of the decedent's family”
means any member of the family (as defined in section 2032A(e)(2)) of the decedent.
I.R.C. § 2031(c)(9) Treatment Of Easements Granted After Death —
In any case in which the qualified conservation easement is granted after the date
of the decedent's death and on or before the due date (including extensions) for
filing the return of tax imposed by section 2001, the deduction under section 2055(f) with respect to such easement shall be allowed to the estate but only if no charitable
deduction is allowed under chapter 1 to any person with respect to the grant of such
easement.
I.R.C. § 2031(c)(10) Application Of This Section To Interests In Partnerships, Corporations, And Trusts —
This section shall apply to an interest in a partnership, corporation, or trust
if at least 30 percent of the entity is owned
(directly or indirectly) by the decedent, as determined under the rules described
in section 2057(e)(3) (as in effect before its repeal).
I.R.C. § 2031(d) Cross Reference —
For executor's right to be furnished on request a statement regarding any valuation
made by the Secretary within the gross estate, see section 7517.
(Aug. 16, 1954, ch. 736, 68A Stat. 380; Oct. 16, 1962,
Pub. L. 87-834, 18(a)(1), 76 Stat. 1052; Oct. 4, 1976, Pub. L. 94-455, title XX, 2008(a)(2)(A), 90 Stat. 1891; Pub. L. 105-34, title V, Sec. 508(a), Aug. 5, 1997, 111 Stat 788; Pub. L. 105-206, title VI, Sec. 6007(g), July 22, 1998, 112 Stat 685; Pub. L. 105-277, title IV, Sec. 4006(c)(3), Oct. 21, 1998, 112 Stat 2681; Pub. L. 107-16, title V, Sec. 551, June 7, 2001, 115 Stat. 38; Pub. L. 113-295, Div. A, title II, Sec. 221(a)(96), Sec. 221(a)(97), Dec. 19, 2014, 128 Stat. 4010;
Pub. L. 115-141, Div. U, title IV, Sec. 401(a)(200), (201), Mar. 23, 2018, 132 Stat. 348.)
BACKGROUND NOTES
Amendments to Part
1981--Pub. L. 97-34, title IV, 403(d)(3)(A)(ii), Aug. 13, 1981, 95 Stat. 304, added item 2044 and redesignated
former items 2044 and 2045 as items 2045 and 2046, respectively.
1976--Pub. L. 94-455, title XX, 2001(c)(1)(N)(iii), 2003(d)(1), 2009(b)(3)(B), Oct. 4, 1976, 90 Stat.
1853, 1862, 1894, added items 2032A and 2045 and substituted “Adjustments for gifts
made within 3 years of decedent's death” for “Transactions in contemplation of death”
in item 2035.
AMENDMENTS
2018—Subsec.
(c)(1). Pub. L. 115-141, Div. U, Sec. 401(a)(200), amended par. (1) by striking all that follows subparagraph
(A) and inserting “(B) $500,000.”. Before being struck, it read as follows:
“(II) $500,000.”
Subsec. (c)(2). Pub. L. 115-141, Div. U, Sec. 401(a)(201), amended par. (2) by substituting “paragraph (5))).” for
“paragraph (5)).”.
2014—Subsec. (c)(1)(B). Pub. L. 113-295, Div. A, Sec. 221(a)(96), amended subpar. (B) by substituting “(II) $500,000.” for
“the exclusion limitation.”.
Subsec. (c)(3). Pub. L. 113-295, Div. A, Sec. 221(a)(96), struck par.
(3). Before being struck, it read as follows:
“(3) Exclusion Limitation.—For purposes of paragraph (1), the exclusion limitation is the limitation determined in accordance with the following
table:
In the case of estates of The exclusion
decedents dying during: limitation is:
1998 $100,000
1999 $200,000
2000 $300,000
2001 $400,000
2002 or thereafter $500,000.”
Subsec. (c)(10). Pub. L. 113-295, Sec. 221(a)(97)(B), amended par. (10) by inserting “(as in effect before its repeal)”
immediately before the period at the end thereof.
2001—Subsec. (c)(2). Pub. L. 107-16, Sec. 551(b), amended par. (2) by adding the sentence at the end.
Subsec. (c)(8)(A)(i). Pub. L. 107-16, Sec. 551(a), amended clause (i). Before amendment it read as follows:
“(i) which is located--
“(I) in or within 25 miles of an area which, on the date of the decedent's death,
is a metropolitan area (as defined by the Office of Management and Budget),
“(II) in or within 25 miles of an area which, on the date of the decedent's death,
is a national park or wilderness area designated as part of the National Wilderness
Preservation System (unless it is determined by the Secretary that land in or within
25 miles of such a park or wilderness area is not under significant development pressure),
or
“(III) in or within 10 miles of an area which, on the date of the decedent's death,
is an Urban National Forest (as designated by the Forest Service),”.
1998--Subsec. (c)(10). Pub. L. 105-277, Sec. 4006(c)(3), amended par. (10) by substituting “section 2057(e)(3)” for “section 2033A(e)(3)”.
Subsec. (c)(6). Pub. L. 105-206, Sec. 6007(g)(2), amended par. (6), by substituting “on or before the due date (including extensions)
for filing the return of tax imposed by section 2001 and shall be made on such return.”
for “on the return of the tax imposed by section 2001. Such an election, once made,
shall be irrevocable.”
Subsec. (c)(9). Pub. L. 105-206, Sec. 6007(g)(1), redesignated par. (9) as par. (10) and added par. (9).
1997--Subsec. (c). Pub. L. 105-34, Sec. 508(a), redesignated subsec. (c) as subsec. (d) and added a new subsec. (c).
1976--Subsec. (c). Pub. L. 94-455 added subsec. (c).
1962--Subsec. (a). Pub. L. 87-834 struck out provisions which excepted real property situated outside the United States.
EFFECTIVE DATE OF 2018 AMENDMENTS
Amendment by Pub. L. 115-141, Div. U, Sec. 401(a)(200), (201), effective March 23, 2018.
EFFECTIVE DATE OF 2014 AMENDMENTS
Amendments by Pub. L. 113-295, Div. A, Sec. 221(a), effective on the date of the enactment of this Act [Enacted:
Dec. 19, 2014].
Section 221(b)(2) of Pub. L. 113-295, Div. A, provided the following Savings Provision:
“(2)
SAVINGS PROVISION.—If—
“(A)
any provision amended or repealed by the amendments made by this section applied to—
“(i)
any transaction occurring before the date of the enactment of this Act [Enacted: Dec.
19, 2014],
“(ii)
any property acquired before such date of enactment, or
“(iii)
any item of income, loss, deduction, or credit taken into account before such date
of enactment, and
“(B)
the treatment of such transaction, property, or item under such provision would (without
regard to the amendments or repeals made by this section)
affect the liability for tax for periods ending after date of enactment, nothing in
the amendments or repeals made by this section shall be construed to affect the treatment
of such transaction, property, or item for purposes of determining liability for tax
for periods ending after such date of enactment.”
EFFECTIVE DATE OF 2001 AMENDMENTS
Amendments by Sec. 551 of Pub. L. 107-16 applicable to estates of decedents dying after December 31, 2000.
Section 901 (Sunset of Provisions of Act) of Pub. L. 107-16, as amended by Pub. L. 107-358 and Pub. L. 111-312, Sec. 101(a), and struck by Pub. L. 112-240, Sec. 101(a)(1) (effective for taxable, plan, or limitation years beginning after Dec. 31, 2012,
and estates of decedents dying, gifts made, or generation skipping transfers after
Dec. 31, 2012),provided that:
“(a) IN GENERAL.--All provisions of, and amendments made by, this Act shall not apply--
“(1) to taxable, plan, or limitation years beginning after December 31, 2012, or
“(2) in the case of title V, to estates of decedents dying, gifts made, or generation
skipping transfers, after December 31, 2012.
“(b) APPLICATION OF CERTAIN LAWS.--The Internal Revenue Code of 1986 and the Employee
Retirement Income Security Act of 1974 shall be applied and administered to years,
estates, gifts, and transfers described in subsection (a) as if the provisions and
amendments described in subsection (a) had never been enacted.
“(c) EXCEPTION.-Subsection (a) shall not apply to section 803 (relating to no federal
income tax on restitution received by victims of the Nazi regime or their heirs or
estates).”
EFFECTIVE DATE OF 1998 AMENDMENTS
Amendment by Sec. 4006(c)(3) of Pub. L. 105-277 applicable on the date of the enactment of this Act [enacted: Oct. 21, 1998].
Amendment by Sec. 6007(g)(2) of Pub. L. 105-206 applicable as if included in the provisions of the Taxpayer Relief Act of 1997 to
which they relate [Effective Date of Pub. L. 105-34, Sec. 508: estates of decedents dying after December 31, 1997].
EFFECTIVE DATE OF 1997 AMENDMENTS
Amendments by Sec. 508(a) of Pub. L. 105-34 applicable to estates of decedents dying after December 31, 1997.
EFFECTIVE DATE OF 1962 AMENDMENT
Section 18(b) of Pub. L. 87-834 provided that:
“(1) Except as provided in paragraph (2), the amendments made by subsection (a) [amending
sections 2031, 2033, 2034, 2035, 2036, 2037, 2038, 2040, and 2041 of this title] shall
apply to the estates of decedents dying after the date of the enactment of this Act
[Oct. 16, 1962].
“(2) In the case of a decedent dying after the date of the enactment of this Act [Oct.
16, 1962] and before July 1, 1964, the value of real property situated outside of
the United States shall not be included in the gross estate (as defined in section
2031(a)) of the decedent--
“(A) under section 2033, 2034, 2035(a), 2036(a), 2037(a), or 2038(a) to the extent
the real property, or the decedent's interest in it, was acquired by the decedent
before February 1, 1962;
“(B) under section 2040 to the extent such property or interest was acquired by the
decedent before February 1, 1962, or was held by the decedent and the survivor in
a joint tenancy or tenancy by the entirety before February 1, 1962;
or
“(C) under section 2041(a) to the extent that before February 1, 1962, such property
or interest was subject to a general power of appointment (as defined in section 2041)
possessed by the decedent.
In the case of real property, or an interest therein, situated outside of the United
States (including a general power of appointment in respect of such property or interest,
and including property held by the decedent and the survivor in a joint tenancy or
tenancy by the entirety) which was acquired by the decedent after January 31, 1962,
by gift within the meaning of section 2511, or from a prior decedent by devise or
inheritance, or by reason of death, form of ownership, or other conditions (including
the exercise or nonexercise of a power of appointment), for purposes of this paragraph
such property or interest therein shall be deemed to have been acquired by the decedent
before February 1, 1962, if before that date the donor or prior decedent had acquired
the property or his interest therein or had possessed a power of appointment in respect
of the property or interest.”
REINSTATEMENT OF ESTATE TAX; REPEAL OF CARRYOVER BASIS
Section 301 of Pub. L. 111-312 provided:
“(a) IN GENERAL.—Each provision of law amended by subtitle A or E of title V of the
Economic Growth and Tax Relief Reconciliation Act of 2001 is amended to read as such
provision would read if such subtitle had never been enacted.
“(b) CONFORMING AMENDMENT.—On and after January 1, 2011, paragraph (1) of section 2505(a) of the Internal Revenue Code of 1986 is amended to read as such paragraph would read if section 521(b)(2) of the
Economic Growth and Tax Relief Reconciliation Act of 2001 had never been enacted.
“(c) SPECIAL ELECTION WITH RESPECT TO ESTATES OF DECEDENTS DYING IN 2010.—Notwithstanding
subsection (a), in the case of an estate of a decedent dying after December 31, 2009,
and before January 1, 2011, the executor (within the meaning of section 2203 of the Internal Revenue Code of 1986) may elect to apply such Code as though the amendments made by subsection
(a) do not apply with respect to chapter 11 of such Code and with respect to property
acquired or passing from such decedent
(within the meaning of section 1014(b) of such Code). Such election shall be made
at such time and in such manner as the Secretary of the Treasury or the Secretary's
delegate shall provide. Such an election once made shall be revocable only with the
consent of the Secretary of the Treasury or the Secretary's delegate. For purposes
of section 2652(a)(1) of such Code, the determination of whether any property is subject
to the tax imposed by such chapter 11 shall be made without regard to any election
made under this subsection.
“(d) EXTENSION OF TIME FOR PERFORMING CERTAIN ACTS.—
“ (1) ESTATE TAX.—In the case of the estate of a decedent dying after December 31,
2009, and before the date of the enactment of this Act, the due date for—
“(A) filing any return under section 6018 of the Internal Revenue Code of 1986 (including any election required to be made on such a return)
as such section is in effect after the date of the enactment of this Act without regard
to any election under subsection (c),
“(B) making any payment of tax under chapter 11 of such Code, and
“(C) making any disclaimer described in section 2518(b) of such Code of an interest
in property passing by reason of the death of such decedent, shall not be earlier
than the date which is 9 months after the date of the enactment of this Act.
“(2) GENERATION-SKIPPING TAX.—In the case of any generation-skipping transfer made
after December 31, 2009, and before the date of the enactment of this Act, the due
date for filing any return under section 2662 of the Internal Revenue Codeof 1986 (including any election required to be made on such a return) shall not be
earlier than the date which is 9 months after the date of the enactment of this Act.
“(e) EFFECTIVE DATE.—Except as otherwise provided in this section, the amendments
made by this section shall apply to estates of decedents dying, and transfers made,
after December 31, 2009.”
TERMINATION
Section 501(a) (Estate Tax Repeal) of Pub. L. 107-16 added Code Sec. 2210, which states that chapter 11 of subtitle B shall not apply
to the estates of decedents dying after December 31, 2009.
Note, however, that Section 901 (Sunset of Provisions of Act) of Pub. L. 107-16, as amended by Pub. L. 107-358 and Pub. L. 111-312, and struck by Pub. L. 112-240, Sec. 101(a)(1) (effective for taxable, plan, or limitation years beginning after Dec. 31, 2012,
and estates of decedents dying, gifts made, or generation skipping transfers after
Dec. 31, 2012), provided that:
“(a)
IN GENERAL.--All provisions of, and amendments made by, this Act shall not apply--
“(1) to taxable, plan, or limitation years beginning after December 31, 2012, or
“(2) in the case of title V, to estates of decedents dying, gifts made, or generation
skipping transfers, after December 31, 2012.
“(b)
APPLICATION OF CERTAIN LAWS.--The Internal Revenue Code of 1986 and the Employee Retirement
Income Security Act of 1974 shall be applied and administered to years, estates, gifts,
and transfers described in subsection (a) as if the provisions and amendments described
in subsection (a) had never been enacted.
“(c)
EXCEPTION.-Subsection (a) shall not apply to section 803 (relating to no federal income
tax on restitution received by victims of the Nazi regime or their heirs or estates).”
