26 U.S.C. § 1015

Basis of property acquired by gifts and transfers in trust

Read at: OLRCuscode.house.gov CornellLII GovInfogovinfo.gov JustiaTitle 26 CasesGoogle Scholar

(a) Gifts after December 31, 1920

If the property was acquired by gift after December 31, 1920, the basis shall be the same as it would be in the hands of the donor or the last preceding owner by whom it was not acquired by gift, except that if such basis (adjusted for the period before the date of the gift as provided in section 1016) is greater than the fair market value of the property at the time of the gift, then for the purpose of determining loss the basis shall be such fair market value. If the facts necessary to determine the basis in the hands of the donor or the last preceding owner are unknown to the donee, the Secretary shall, if possible, obtain such facts from such donor or last preceding owner, or any other person cognizant thereof. If the Secretary finds it impossible to obtain such facts, the basis in the hands of such donor or last preceding owner shall be the fair market value of such property as found by the Secretary as of the date or approximate date at which, according to the best information that the Secretary is able to obtain, such property was acquired by such donor or last preceding owner.

(b) Transfer in trust after December 31, 1920

If the property was acquired after December 31, 1920, by a transfer in trust (other than by a transfer in trust by a gift, bequest, or devise), the basis shall be the same as it would be in the hands of the grantor increased in the amount of gain or decreased in the amount of loss recognized to the grantor on such transfer under the law applicable to the year in which the transfer was made.

If the property was acquired by gift or transfer in trust on or before December 31, 1920, the basis shall be the fair market value of such property at the time of such acquisition.

(d) Increased basis for gift tax paid(1) In generalIf—(A) the property is acquired by gift on or after September 2, 1958, the basis shall be the basis determined under subsection (a), increased (but not above the fair market value of the property at the time of the gift) by the amount of gift tax paid with respect to such gift, or(B) the property was acquired by gift before September 2, 1958, and has not been sold, exchanged, or otherwise disposed of before such date, the basis of the property shall be increased on such date by the amount of gift tax paid with respect to such gift, but such increase shall not exceed an amount equal to the amount by which the fair market value of the property at the time of the gift exceeded the basis of the property in the hands of the donor at the time of the gift.(2) Amount of tax paid with respect to gift

For purposes of paragraph (1), the amount of gift tax paid with respect to any gift is an amount which bears the same ratio to the amount of gift tax paid under chapter 12 with respect to all gifts made by the donor for the calendar year (or preceding calendar period) in which such gift is made as the amount of such gift bears to the taxable gifts (as defined in section 2503(a) but computed without the deduction allowed by section 2521) made by the donor during such calendar year or period. For purposes of the preceding sentence, the amount of any gift shall be the amount included with respect to such gift in determining (for the purposes of section 2503(a)) the total amount of gifts made during the calendar year or period, reduced by the amount of any deduction allowed with respect to such gift under section 2522 (relating to charitable deduction) or under section 2523 (relating to marital deduction).

(3) Gifts treated as made one-half by each spouse

For purposes of paragraph (1), where the donor and his spouse elected, under section 2513 to have the gift considered as made one-half by each, the amount of gift tax paid with respect to such gift under chapter 12 shall be the sum of the amounts of tax paid with respect to each half of such gift (computed in the manner provided in paragraph (2)).

(4) Treatment as adjustment to basis

For purposes of section 1016(b), an increase in basis under paragraph (1) shall be treated as an adjustment under section 1016(a).

(5) Application to gifts before 1955

With respect to any property acquired by gift before 1955, references in this subsection to any provision of this title shall be deemed to refer to the corresponding provision of the Internal Revenue Code of 1939 or prior revenue laws which was effective for the year in which such gift was made.

(6) Special rule for gifts made after December 31, 1976(A) In generalIn the case of any gift made after December 31, 1976, the increase in basis provided by this subsection with respect to any gift for the gift tax paid under chapter 12 shall be an amount (not in excess of the amount of tax so paid) which bears the same ratio to the amount of tax so paid as—(i) the net appreciation in value of the gift, bears to(ii) the amount of the gift.(B) Net appreciation

For purposes of paragraph (1), the net appreciation in value of any gift is the amount by which the fair market value of the gift exceeds the donor’s adjusted basis immediately before the gift.

(e) Gifts between spouses

In the case of any property acquired by gift in a transfer described in section 1041(a), the basis of such property in the hands of the transferee shall be determined under section 1041(b)(2) and not this section.

(Aug. 16, 1954, ch. 736, 68A Stat. 298; Pub. L. 85–866, title I, § 43(a), Sept. 2, 1958, 72 Stat. 1640; Pub. L. 91–614, title I, § 102(d)(1), Dec. 31, 1970, 84 Stat. 1841; Pub. L. 94–455, title XIX, §§ 1901(a)(122), 1906(b) (13)(A), title XX, § 2005(c), Oct. 4, 1976, 90 Stat. 1784, 1834, 1877; Pub. L. 97–34, title IV, § 442(d)(1), Aug. 13, 1981, 95 Stat. 322; Pub. L. 98–369, div. A, title IV, § 421(b)(5), July 18, 1984, 98 Stat. 794.)Editorial NotesReferences in Text

Section 2521, referred to in subsec. (d)(2), was repealed by Pub. L. 94–455, title XX, § 2001(b)(3), Oct. 4, 1976, 90 Stat. 1849.

The Internal Revenue Code of 1939, referred to in subsec. (d)(5), is act Feb. 10, 1939, ch. 2, 53 Stat. 1. Prior to the enactment of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the 1939 Code was classified to former Title 26, Internal Revenue Code. For table of comparisons of the 1939 Code to the 1986 Code, see Table I preceding section 1 of this title.

Editorial NotesAmendments

1984—Subsec. (e). Pub. L. 98–369 added subsec. (e).

1981—Subsec. (d)(2). Pub. L. 97–34 substituted “calendar year (or preceding calendar period)” for “calendar quarter (or calendar year if the gift was made before January 1, 1971)” and “calendar year or period” for “calendar quarter or year” in two places.

1976—Subsec. (a). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary” in four places.

Subsec. (d)(1)(A), (B). Pub. L. 94–455, § 1901(a)(122), substituted “September 2, 1958” for “the date of enactment of the Technical Amendments Act of 1958”.

Subsec. (d)(6). Pub. L. 94–455, § 2005(c), added par. (6).

1970—Subsec. (d)(2). Pub. L. 91–614 substituted “calendar quarter (or calendar year if the gift was made before January 1, 1971)” for “calendar year” the first place it appears and “calendar quarter or year” for “calendar year” every other place it appears.

1958—Subsec. (d). Pub. L. 85–866 added subsec. (d).

Statutory Notes and Related SubsidiariesEffective Date of 1984 Amendment

Amendment by Pub. L. 98–369 applicable to transfers after July 18, 1984, in taxable years ending after such date, subject to election to have amendment apply to transfers after 1983 or to transfers pursuant to existing decrees, see section 421(d) of Pub. L. 98–369, set out as an Effective Date note under section 1041 of this title.

Effective Date of 1981 Amendment

Amendment by Pub. L. 97–34 applicable with respect to gifts made after Dec. 31, 1981, see section 442(e) of Pub. L. 97–34, set out as a note under section 2501 of this title.

Effective Date of 1976 Amendment

Amendment by section 1901(a)(122) of Pub. L. 94–455 applicable with respect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.

Pub. L. 94–455, title XX, § 2005(f), Oct. 4, 1976, 90 Stat. 1878, as amended by Pub. L. 95–600, title V, § 515(6), Nov. 6, 1978, 92 Stat. 2884, provided that:“(1) Except as provided in paragraph (2), the amendments made by this section [enacting sections 1023, 1040, 6039A, and 6694 of this title, amending sections 691, 1016, and 1246 of this title, and renumbering former section 1023 as 1024] shall apply in respect of decedents dying after December 31, 1979.“(2) The amendment made by subsection (c) [amending this section] shall apply to gifts made after December 31, 1976.”

Effective Date of 1970 Amendment

Amendment by Pub. L. 91–614 applicable with respect to gifts made after Dec. 31, 1970, see section 102(e) of Pub. L. 91–614, set out as a note under section 2501 of this title.

Effective Date of 1958 Amendment

Amendment by Pub. L. 85–866 applicable to taxable years beginning after Dec. 31, 1953, and ending after Aug. 16, 1954, see section 1(c)(1) of Pub. L. 85–866, set out as a note under section 165 of this title.

Notes of Decisions

Cited in 15 cases, 1962–2014 · leading case: United States v. Chicago, Burlington & Quincy R.R., 412 U.S. 401 (1973).

Sort: Relevance Newest Treatment

United States v. Chicago, Burlington & Quincy R.R., 412 U.S. 401 (1973). · cites it 2× “" This provision was carried over into § 1015 (a) of the 1954 Code, 26 U. S. C. § 1015 (a). The language of § 362 (c) of the 1954 Code, to the effect that the basis of a nonshareholder's contribution made on or after June 22, 1954, to the capital of a corporation shall be zero…”

Malone v. United States, 326 F. Supp. 106 (N.D. Miss. 1971). · cites it 3× “17 Plaintiff argues that if his transfer to the trust is a disposition taxable to him, there will result double taxation on the gain upon the trustees’ later disposition of the property, by asserting that the trust basis at that time will be $13,350, the same as plaintiff’s…”

Principal Life Ins. Co. & Subsidiaries v. United States, 116 Fed. Cl. 82 (Fed. Cl. 2014). “§ 1031 , or gifts under 26 U.S.C. § 1015 (a). One must wonder whether defendant has considered the ramifications if its "actual economic” rule were applied to gains taxable under section 61 of the Code.”

State Dep't of Revenue v. McLemore, 540 So. 2d 754 (Ala. Civ. App. 1988). · cites it 5× “Section 40-18-6(a)(2) was amended to conform to the federal income tax law codified in 26 U.S.C. § 1015 . The language in this section, as amended, closely parallels the language in 26 U.”

Vets. Found. v. Comm'r of Internal Revenue, 317 F.2d 456 (10th Cir. 1963). · cites it 2× “§ 502 , 2 contends that each item of personal property donated was a gift, and that in computing its taxable income the donor’s cost or the fair market value of the property at the time it was donated should be used for the taxpayer’s basis pursuant to 26 U.”

Provident Nat'l Bank v. United States, 507 F. Supp. 1197 (E.D. Pa. 1981). “Under section 1015 of the Internal Revenue Code, 26 U.S.C. § 1015 , the basis of the stocks was calculated by using the same basis as the stocks had in the hands of the donor and ^increasing it by the gift tax paid.”

Fehrs Fin. Co., Cross-Appellee v. Comm'r of Internal Revenue, Cross-Appellant, 487 F.2d 184 (8th Cir. 1973). “*191 The Court awarded the addition to basis pursuant to 26 U.S.C. § 1015 (d)(1)(A) which provides in applicable part: If— (A) the property is acquired by gift * * * the basis shall be the basis * * * increased (but not above the fay: market value of the property at the time of…”

United States v. Georgia R.R. & Banking Co., 348 F.2d 278 (5th Cir. 1965). “26 U.S.C.A. § 1015 . In such a situation, the donee might be treated as having a de-preciable investment in such property if it is of an exhaustible nature.”

The Beal Found. v. United States, 559 F.2d 359 (5th Cir. 1977). “26 U.S.C. § 1015 provides in part: (a) Gifts after December 31, 1920.”

Dana A. Hinckley & Adelaide Hinckley v. Comm'r of Internal Revenue, 410 F.2d 937 (8th Cir. 1969). “26 U.S.C.A. § 1015 (c) provides: “(c) Gift or transfer in trust before January 1, 1921.”

Winthrop M. Crane, III v. Comm'r of Internal Revenue, 368 F.2d 800 (1st Cir. 1966). “26 U.S.C. § 1015 (a). Their receipt of income from the stock did not make them owners of the corpus.”

United States v. Ann E. Lattimore, 353 F.2d 379 (9th Cir. 1965). “We do not now express an opinion of the effect of § 1015 of the Internal Revenue Code of 1954, 26 U.S.C. § 1015 , upon Miss Lattimore’s burden of proof on basis with respect to the gifts.”

Show all 15 citing cases →

Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.