{"identifier":"/us/usc/t26/s2523","title":26,"num":"\u00a7\u202f2523.","heading":"Gift to spouse","text":"\u00a7\u202f2523.\nGift to spouse\n(a)\nAllowance of deduction\nWhere a donor transfers during the calendar year by gift an interest in property to a donee who at the time of the gift is the donor\u2019s spouse, there shall be allowed as a deduction in computing taxable gifts for the calendar year an amount with respect to such interest equal to its value.\n(b)\nLife estate or other terminable interest\nWhere, on the lapse of time, on the occurrence of an event or contingency, or on the failure of an event or contingency to occur, such interest transferred to the spouse will terminate or fail, no deduction shall be allowed with respect to such interest\u2014\n(1) if the donor retains in himself, or transfers or has transferred (for less than an adequate and full consideration in money or money\u2019s worth) to any person other than such donee spouse (or the estate of such spouse), an interest in such property, and if by reason of such retention or transfer the donor (or his heirs or assigns) or such person (or his heirs or assigns) may possess or enjoy any part of such property after such termination or failure of the interest transferred to the donee spouse; or\n(2) if the donor immediately after the transfer to the donee spouse has a power to appoint an interest in such property which he can exercise (either alone or in conjunction with any person) in such manner that the appointee may possess or enjoy any part of such property after such termination or failure of the interest transferred to the donee spouse. For purposes of this paragraph, the donor shall be considered as having immediately after the transfer to the donee spouse such power to appoint even though such power cannot be exercised until after the lapse of time, upon the occurrence of an event or contingency, or on the failure of an event or contingency to occur.\nAn exercise or release at any time by the donor, either alone or in conjunction with any person, of a power to appoint an interest in property, even though not otherwise a transfer, shall, for purposes of paragraph (1), be considered as a transfer by him. Except as provided in subsection (e), where at the time of the transfer it is impossible to ascertain the particular person or persons who may receive from the donor an interest in property so transferred by him, such interest shall, for purposes of paragraph (1), be considered as transferred to a person other than the donee spouse.\n(c)\nInterest in unidentified assets\nWhere the assets out of which, or the proceeds of which, the interest transferred to the donee spouse may be satisfied include a particular asset or assets with respect to which no deduction would be allowed if such asset or assets were transferred from the donor to such spouse, then the value of the interest transferred to such spouse shall, for purposes of subsection (a), be reduced by the aggregate value of such particular assets.\n(d)\nJoint interests\nIf the interest is transferred to the donee spouse as sole joint tenant with the donor or as tenant by the entirety, the interest of the donor in the property which exists solely by reason of the possibility that the donor may survive the donee spouse, or that there may occur a severance of the tenancy, shall not be considered for purposes of subsection (b) as an interest retained by the donor in himself.\n(e)\nLife estate with power of appointment in donee spouse\nWhere the donor transfers an interest in property, if by such transfer his spouse is entitled for life to all of the income from the entire interest, or all the income from a specific portion thereof, payable annually or at more frequent intervals, with power in the donee spouse to appoint the entire interest, or such specific portion (exercisable in favor of such donee spouse, or of the estate of such donee spouse, or in favor of either, whether or not in each case the power is exercisable in favor of others), and with no power in any other person to appoint any part of such interest, or such portion, to any person other than the donee spouse\u2014\n(1) the interest, or such portion, so transferred shall, for purposes of subsection (a) be considered as transferred to the donee spouse, and\n(2) no part of the interest, or such portion, so transferred shall, for purposes of subsection (b)(1), be considered as retained in the donor or transferred to any person other than the donee spouse.\nThis subsection shall apply only if, by such transfer, such power in the donee spouse to appoint the interest, or such portion, whether exercisable by will or during life, is exercisable by such spouse alone and in all events. For purposes of this subsection, the term \u201cspecific portion\u201d only includes a portion determined on a fractional or percentage basis.\n(f)\nElection with respect to life estate for donee spouse\n(1)\nIn general\nIn the case of qualified terminable interest property\u2014\n(A) for purposes of subsection (a), such property shall be treated as transferred to the donee spouse, and\n(B) for purposes of subsection (b)(1), no part of such property shall be considered as retained in the donor or transferred to any person other than the donee spouse.\n(2)\nQualified terminable interest property\nFor purposes of this subsection, the term \u201cqualified terminable interest property\u201d means any property\u2014\n(A) which is transferred by the donor spouse,\n(B) in which the donee spouse has a qualifying income interest for life, and\n(C) to which an election under this subsection applies.\n(3)\nCertain rules made applicable\nFor purposes of this subsection, rules similar to the rules of clauses (ii), (iii), and (iv) of section 2056(b)(7)(B) shall apply and the rules of section 2056(b)(10) shall apply.\n(4)\nElection\n(A)\nTime and manner\nAn election under this subsection with respect to any property shall be made on or before the date prescribed by section 6075(b) for filing a gift tax return with respect to the transfer (determined without regard to section 6019(2)) and shall be made in such manner as the Secretary shall by regulations prescribe.\n(B)\nElection irrevocable\nAn election under this subsection, once made, shall be irrevocable.\n(5)\nTreatment of interest retained by donor spouse\n(A)\nIn general\nIn the case of any qualified terminable interest property\u2014\n(i) such property shall not be includible in the gross estate of the donor spouse, and\n(ii) any subsequent transfer by the donor spouse of an interest in such property shall not be treated as a transfer for purposes of this chapter.\n(B)\nSubparagraph (A) not to apply after transfer by donee spouse\nSubparagraph (A) shall not apply with respect to any property after the donee spouse is treated as having transferred such property under section 2519, or such property is includible in the donee spouse\u2019s gross estate under section 2044.\n(6)\nTreatment of joint and survivor annuities\nIn the case of a joint and survivor annuity where only the donor spouse and donee spouse have the right to receive payments before the death of the last spouse to die\u2014\n(A) the donee spouse\u2019s interest shall be treated as a qualifying income interest for life,\n(B) the donor spouse shall be treated as having made an election under this subsection with respect to such annuity unless the donor spouse otherwise elects on or before the date specified in paragraph (4)(A),\n(C) paragraph (5) and section 2519 shall not apply to the donor spouse\u2019s interest in the annuity, and\n(D) if the donee spouse dies before the donor spouse, no amount shall be includible in the gross estate of the donee spouse under section 2044 with respect to such annuity.\nAn election under subparagraph (B), once made, shall be irrevocable.\n(g)\nSpecial rule for charitable remainder trusts\n(1)\nIn general\nIf, after the transfer, the donee spouse is the only beneficiary who is not a charitable beneficiary (other than the donor) of a qualified charitable remainder trust, subsection (b) shall not apply to the interest in such trust which is transferred to the donee spouse.\n(2)\nDefinitions\nFor purposes of paragraph (1), the term \u201ccharitable beneficiary\u201d and \u201cqualified charitable remainder trust\u201d have the meanings given to such terms by section 2056(b)(8)(B).\n(h)\nDenial of double deduction\nNothing in this section or any other provision of this chapter shall allow the value of any interest in property to be deducted under this chapter more than once with respect to the same donor.\n(i)\nDisallowance of marital deduction where spouse not citizen\nIf the spouse of the donor is not a citizen of the United States\u2014\n(1) no deduction shall be allowed under this section,\n(2) section 2503(b) shall be applied with respect to gifts which are made by the donor to such spouse and with respect to which a deduction would be allowable under this section but for paragraph (1) by substituting \u201c$100,000\u201d for \u201c$10,000\u201d, and\n(3) the principles of sections 2515 and 2515A (as such sections were in effect before their repeal by the Economic Recovery Tax Act of 1981) shall apply, except that the provisions of such section 2515 providing for an election shall not apply.\nThis subsection shall not apply to any transfer resulting from the acquisition of rights under a joint and survivor annuity described in subsection (f)(6).","url":"https://projectusc.org/usc/t26/s2523.html","content":[{"t":"sec","id":"/us/usc/t26/s2523","children":[{"t":"num","text":"\u00a7\u202f2523."},{"t":"heading","text":"Gift to spouse"},{"t":"subsec","id":"/us/usc/t26/s2523/a","children":[{"t":"num","text":"(a)"},{"t":"heading","text":"Allowance of deduction"},{"t":"content","children":[{"t":"p","text":"Where a donor transfers during the calendar year by gift an interest in property to a donee who at the time of the gift is the donor\u2019s spouse, there shall be allowed as a deduction in computing taxable gifts for the calendar year an amount with respect to such interest equal to its value.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s2523/b","children":[{"t":"num","text":"(b)"},{"t":"heading","text":"Life estate or other terminable interest"},{"t":"chapeau","text":"Where, on the lapse of time, on the occurrence of an event or contingency, or on the failure of an event or contingency to occur, such interest transferred to the spouse will terminate or fail, no deduction shall be allowed with respect to such interest\u2014"},{"t":"para","id":"/us/usc/t26/s2523/b/1","children":[{"t":"num","text":"(1)"},{"t":"content","text":" if the donor retains in himself, or transfers or has transferred (for less than an adequate and full consideration in money or money\u2019s worth) to any person other than such donee spouse (or the estate of such spouse), an interest in such property, and if by reason of such retention or transfer the donor (or his heirs or assigns) or such person (or his heirs or assigns) may possess or enjoy any part of such property after such termination or failure of the interest transferred to the donee spouse; or","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s2523/b/2","children":[{"t":"num","text":"(2)"},{"t":"content","text":" if the donor immediately after the transfer to the donee spouse has a power to appoint an interest in such property which he can exercise (either alone or in conjunction with any person) in such manner that the appointee may possess or enjoy any part of such property after such termination or failure of the interest transferred to the donee spouse. For purposes of this paragraph, the donor shall be considered as having immediately after the transfer to the donee spouse such power to appoint even though such power cannot be exercised until after the lapse of time, upon the occurrence of an event or contingency, or on the failure of an event or contingency to occur.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"An exercise or release at any time by the donor, either alone or in conjunction with any person, of a power to appoint an interest in property, even though not otherwise a transfer, shall, for purposes of paragraph (1), be considered as a transfer by him. Except as provided in subsection (e), where at the time of the transfer it is impossible to ascertain the particular person or persons who may receive from the donor an interest in property so transferred by him, such interest shall, for purposes of paragraph (1), be considered as transferred to a person other than the donee spouse.","tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s2523/c","children":[{"t":"num","text":"(c)"},{"t":"heading","text":"Interest in unidentified assets"},{"t":"content","children":[{"t":"p","text":"Where the assets out of which, or the proceeds of which, the interest transferred to the donee spouse may be satisfied include a particular asset or assets with respect to which no deduction would be allowed if such asset or assets were transferred from the donor to such spouse, then the value of the interest transferred to such spouse shall, for purposes of subsection (a), be reduced by the aggregate value of such particular assets.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s2523/d","children":[{"t":"num","text":"(d)"},{"t":"heading","text":"Joint interests"},{"t":"content","children":[{"t":"p","text":"If the interest is transferred to the donee spouse as sole joint tenant with the donor or as tenant by the entirety, the interest of the donor in the property which exists solely by reason of the possibility that the donor may survive the donee spouse, or that there may occur a severance of the tenancy, shall not be considered for purposes of subsection (b) as an interest retained by the donor in himself.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s2523/e","children":[{"t":"num","text":"(e)"},{"t":"heading","text":"Life estate with power of appointment in donee spouse"},{"t":"chapeau","text":"Where the donor transfers an interest in property, if by such transfer his spouse is entitled for life to all of the income from the entire interest, or all the income from a specific portion thereof, payable annually or at more frequent intervals, with power in the donee spouse to appoint the entire interest, or such specific portion (exercisable in favor of such donee spouse, or of the estate of such donee spouse, or in favor of either, whether or not in each case the power is exercisable in favor of others), and with no power in any other person to appoint any part of such interest, or such portion, to any person other than the donee spouse\u2014"},{"t":"para","id":"/us/usc/t26/s2523/e/1","children":[{"t":"num","text":"(1)"},{"t":"content","text":" the interest, or such portion, so transferred shall, for purposes of subsection (a) be considered as transferred to the donee spouse, and","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s2523/e/2","children":[{"t":"num","text":"(2)"},{"t":"content","text":" no part of the interest, or such portion, so transferred shall, for purposes of subsection (b)(1), be considered as retained in the donor or transferred to any person other than the donee spouse.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"This subsection shall apply only if, by such transfer, such power in the donee spouse to appoint the interest, or such portion, whether exercisable by will or during life, is exercisable by such spouse alone and in all events. For purposes of this subsection, the term \u201cspecific portion\u201d only includes a portion determined on a fractional or percentage basis.","tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s2523/f","children":[{"t":"num","text":"(f)"},{"t":"heading","text":"Election with respect to life estate for donee spouse"},{"t":"para","id":"/us/usc/t26/s2523/f/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"In the case of qualified terminable interest property\u2014"},{"t":"subpara","id":"/us/usc/t26/s2523/f/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" for purposes of subsection (a), such property shall be treated as transferred to the donee spouse, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s2523/f/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" for purposes of subsection (b)(1), no part of such property shall be considered as retained in the donor or transferred to any person other than the donee spouse.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s2523/f/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Qualified terminable interest property"},{"t":"chapeau","text":"For purposes of this subsection, the term \u201cqualified terminable interest property\u201d means any property\u2014"},{"t":"subpara","id":"/us/usc/t26/s2523/f/2/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" which is transferred by the donor spouse,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s2523/f/2/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" in which the donee spouse has a qualifying income interest for life, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s2523/f/2/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" to which an election under this subsection applies.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s2523/f/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Certain rules made applicable"},{"t":"content","children":[{"t":"p","text":"For purposes of this subsection, rules similar to the rules of clauses (ii), (iii), and (iv) of section 2056(b)(7)(B) shall apply and the rules of section 2056(b)(10) shall apply.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s2523/f/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Election"},{"t":"subpara","id":"/us/usc/t26/s2523/f/4/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Time and manner"},{"t":"content","children":[{"t":"p","text":"An election under this subsection with respect to any property shall be made on or before the date prescribed by section 6075(b) for filing a gift tax return with respect to the transfer (determined without regard to section 6019(2)) and shall be made in such manner as the Secretary shall by regulations prescribe.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s2523/f/4/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Election irrevocable"},{"t":"content","children":[{"t":"p","text":"An election under this subsection, once made, shall be irrevocable.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s2523/f/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Treatment of interest retained by donor spouse"},{"t":"subpara","id":"/us/usc/t26/s2523/f/5/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"In the case of any qualified terminable interest property\u2014"},{"t":"clause","id":"/us/usc/t26/s2523/f/5/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" such property shall not be includible in the gross estate of the donor spouse, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s2523/f/5/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" any subsequent transfer by the donor spouse of an interest in such property shall not be treated as a transfer for purposes of this chapter.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s2523/f/5/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Subparagraph (A) not to apply after transfer by donee spouse"},{"t":"content","children":[{"t":"p","text":"Subparagraph (A) shall not apply with respect to any property after the donee spouse is treated as having transferred such property under section 2519, or such property is includible in the donee spouse\u2019s gross estate under section 2044.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s2523/f/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"Treatment of joint and survivor annuities"},{"t":"chapeau","text":"In the case of a joint and survivor annuity where only the donor spouse and donee spouse have the right to receive payments before the death of the last spouse to die\u2014"},{"t":"subpara","id":"/us/usc/t26/s2523/f/6/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the donee spouse\u2019s interest shall be treated as a qualifying income interest for life,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s2523/f/6/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the donor spouse shall be treated as having made an election under this subsection with respect to such annuity unless the donor spouse otherwise elects on or before the date specified in paragraph (4)(A),","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s2523/f/6/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" paragraph (5) and section 2519 shall not apply to the donor spouse\u2019s interest in the annuity, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s2523/f/6/D","children":[{"t":"num","text":"(D)"},{"t":"content","text":" if the donee spouse dies before the donor spouse, no amount shall be includible in the gross estate of the donee spouse under section 2044 with respect to such annuity.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"An election under subparagraph (B), once made, shall be irrevocable.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s2523/g","children":[{"t":"num","text":"(g)"},{"t":"heading","text":"Special rule for charitable remainder trusts"},{"t":"para","id":"/us/usc/t26/s2523/g/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"If, after the transfer, the donee spouse is the only beneficiary who is not a charitable beneficiary (other than the donor) of a qualified charitable remainder trust, subsection (b) shall not apply to the interest in such trust which is transferred to the donee spouse.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s2523/g/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Definitions"},{"t":"content","children":[{"t":"p","text":"For purposes of paragraph (1), the term \u201ccharitable beneficiary\u201d and \u201cqualified charitable remainder trust\u201d have the meanings given to such terms by section 2056(b)(8)(B).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s2523/h","children":[{"t":"num","text":"(h)"},{"t":"heading","text":"Denial of double deduction"},{"t":"content","children":[{"t":"p","text":"Nothing in this section or any other provision of this chapter shall allow the value of any interest in property to be deducted under this chapter more than once with respect to the same donor.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s2523/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"Disallowance of marital deduction where spouse not citizen"},{"t":"chapeau","text":"If the spouse of the donor is not a citizen of the United States\u2014"},{"t":"para","id":"/us/usc/t26/s2523/i/1","children":[{"t":"num","text":"(1)"},{"t":"content","text":" no deduction shall be allowed under this section,","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s2523/i/2","children":[{"t":"num","text":"(2)"},{"t":"content","text":" section 2503(b) shall be applied with respect to gifts which are made by the donor to such spouse and with respect to which a deduction would be allowable under this section but for paragraph (1) by substituting \u201c$100,000\u201d for \u201c$10,000\u201d, and","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s2523/i/3","children":[{"t":"num","text":"(3)"},{"t":"content","text":" the principles of sections 2515 and 2515A (as such sections were in effect before their repeal by the Economic Recovery Tax Act of 1981) shall apply, except that the provisions of such section 2515 providing for an election shall not apply.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"This subsection shall not apply to any transfer resulting from the acquisition of rights under a joint and survivor annuity described in subsection (f)(6).","tail":"\n"}],"tail":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"}]}]}