26 U.S.C. § 2503

Taxable gifts

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(a) General definition

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).

(b) Exclusions from gifts(1) In general

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.

(2) Inflation adjustmentIn 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—(A) $10,000, multiplied by(B) 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.(c) Transfer for the benefit of minorNo 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—(1) may be expended by, or for the benefit of, the donee before his attaining the age of 21 years, and(2) will to the extent not so expended—(A) pass to the donee on his attaining the age of 21 years, and(B) 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to the estate of the donee or as he may appoint under a general power of appointment as defined in section 2514(c).[(d) Repealed. Pub. L. 97–34, title III, § 311(h)(5), Aug. 13, 1981, 95 Stat. 282](e) Exclusion for certain transfers for educational expenses or medical expenses(1) In general

Any qualified transfer shall not be treated as a transfer of property by gift for purposes of this chapter.

(2) Qualified transferFor purposes of this subsection, the term “qualified transfer” means any amount paid on behalf of an individual—(A) as tuition to an educational organization described in section 170(b)(1)(A)(ii) for the education or training of such individual, or(B) to any person who provides medical care (as defined in section 213(d)) with respect to such individual as payment for such medical care.(f) Waiver of certain pension rights

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.

(g) Treatment of certain loans of artworks(1) In generalFor 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—(A) 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(B) the use of such work by such organization is related to the purpose or function constituting the basis for its exemption under section 501.(2) DefinitionsFor purposes of this section—(A) Qualified work of art

The term “qualified work of art” means any archaeological, historic, or creative tangible personal property.

(B) Private foundation

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)).

(Aug. 16, 1954, ch. 736, 68A Stat. 404; Pub. L. 91–614, title I, § 102(a)(3), Dec. 31, 1970, 84 Stat. 1839; Pub. L. 95–600, title VII, § 702(j)(2), Nov. 6, 1978, 92 Stat. 2931; Pub. L. 97–34, title III, § 311(h)(5), title IV, §§ 441(a), (b), 442(a)(3), Aug. 13, 1981, 95 Stat. 282, 319, 320; Pub. L. 99–514, title XVIII, § 1898(h)(1)(B), Oct. 22, 1986, 100 Stat. 2957; Pub. L. 100–647, title I, § 1018(s)(2)(A), (u)(52), Nov. 10, 1988, 102 Stat. 3586, 3593; Pub. L. 101–239, title VII, § 7811(m)(1), Dec. 19, 1989, 103 Stat. 2412; Pub. L. 105–34, title V, § 501(c), Aug. 5, 1997, 111 Stat. 846; Pub. L. 115–97, title I, § 11002(d)(1)(EE), Dec. 22, 2017, 131 Stat. 2060.)Inflation Adjusted Items for Certain Years

For inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under section 1 of this title.

Editorial NotesAmendments

2017—Subsec. (b)(2)(B). Pub. L. 115–97 substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.

1997—Subsec. (b). Pub. L. 105–34 designated existing provisions as par. (1), inserted par. heading, realigned margins, and added par. (2).

1989—Subsecs. (f), (g). Pub. L. 101–239 redesignated subsec. (f), relating to treatment of certain loans of artworks, as (g).

1988—Subsec. (e)(2)(B). Pub. L. 100–647, § 1018(u)(52), substituted “section 213(d)” for “section 213(e)”.

Subsec. (f). Pub. L. 100–647, § 1018(s)(2)(A), added subsec. (f) relating to treatment of certain loans of artworks.

1986—Subsec. (f). Pub. L. 99–514 added subsec. (f).

1981—Subsec. (a). Pub. L. 97–34, § 442(a)(3)(A), substituted “the total amount of gifts made during the calendar year, less the deductions provided in subchapter C (section 2522 and following)” for “, in the case of gifts made after December 31, 1970, the total amount of gifts made during calendar quarter, less the deductions provided in subchapter C (sec. 2521 and following” and struck out provision that in the case of gifts made before Jan. 1, 1971, “taxable gifts” means the total amount of gifts made during the calendar year, less the deductions provided in subchapter C.

Subsec. (b). Pub. L. 97–34, § 442(a)(3)(B), substituted provision that 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 subsec. (a), be included in the total amount of gifts made during such year for provision that in computing taxable gifts for the calendar quarter, in the case of gifts, other than gifts of future interests in property, made to any person by the donor during the calendar year 1971 and subsequent calendar years, $10,000 of such gifts to such person less the aggregate of the amounts of such gifts to such person during all preceding calendar quarters of the calendar year shall not, for purposes of subsec. (a), be included in the total amount of gifts made during such quarter.

Pub. L. 97–34, § 441(a), substituted “$10,000” for “$3,000”.

Subsec. (d). Pub. L. 97–34, § 311(h)(5), repealed subsec. (d) which related to individual retirement accounts, etc., for spouse.

Subsec. (e). Pub. L. 97–34, § 441(b), added subsec. (e).

1978—Subsec. (d). Pub. L. 95–600 added subsec. (d).

1970—Subsec. (a). Pub. L. 91–614, § 102(a)(3)(A), divided definition of “taxable gifts” into gifts made after Dec. 31, 1970, where taxable gifts are based on the total amount of gifts made during the calendar quarter, less the applicable deductions, and gifts made before Jan. 1, 1971, where taxable gifts are based on the total amount of gifts made during the calendar year, less the applicable deductions.

Subsec. (b). Pub. L. 91–614, § 102(a)(3)(B), substituted provisions with regard to computing taxable gifts for the calendar quarter, in the case of gifts made to any persons by the donor during the calendar year 1971 and subsequent calendar years, $3,000 of such gifts to such person less the aggregate of the amounts of such gifts to such person during all preceding calendar quarters of the calendar year shall not be included in the total amount of gifts made during such quarter for provisions requiring in the case of gifts made to any person by the donor during the calendar year 1955 and subsequent calendar years, the first $3,000 of such gifts to such person shall not be included in the total amount of gifts made during such year.

Statutory Notes and Related SubsidiariesEffective Date of 2017 Amendment

Amendment by Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 11002(e) of Pub. L. 115–97, set out as a note under section 1 of this title.

Effective Date of 1997 Amendment

Amendment by Pub. L. 105–34 applicable to estates of decedents dying, and gifts made, after Dec. 31, 1997, see section 501(f) of Pub. L. 105–34, set out as a note under section 2001 of this title.

Effective Date of 1989 Amendment

Amendment by Pub. L. 101–239 effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100–647, to which such amendment relates, see section 7817 of Pub. L. 101–239, set out as a note under section 1 of this title.

Effective Date of 1988 Amendment

Pub. L. 100–647, title I, § 1018(s)(2)(B), Nov. 10, 1988, 102 Stat. 3587, provided that: “The amendment made by subparagraph (A) [amending this section] shall apply to loans after July 31, 1969.”

Amendment by section 1018(u)(52) of Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.

Effective Date of 1986 Amendment

Amendment by Pub. L. 99–514 effective as if included in the provision of the Retirement Equity Act of 1984, Pub. L. 98–397, to which such amendment relates, except as otherwise provided, see section 1898(j) of Pub. L. 99–514, set out as a note under section 401 of this title.

Effective Date of 1981 Amendment

Amendment by section 311(h)(5) of Pub. L. 97–34 applicable to taxable years beginning after Dec. 31, 1981, see section 311(i)(1) of Pub. L. 97–34, set out as a note under section 219 of this title.

Pub. L. 97–34, title IV, § 441(c), Aug. 13, 1981, 95 Stat. 319, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that:“(1)In general.—Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to transfers after December 31, 1981.“(2)Transitional rule.—If—“(A) an instrument executed before the date which is 30 days after the date of the enactment of this Act [Aug. 13, 1981] provides for a power of appointment which may be exercised during any period after December 31, 1981,“(B) such power of appointment is expressly defined in terms of, or by reference to, the amount of the gift tax exclusion under section 2503(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (or the corresponding provision of prior law),“(C) the instrument described in subparagraph (A) has not been amended on or after the date which is 30 days after the date of the enactment of this Act [Aug. 13, 1981], and“(D) the State has not enacted a statute applicable to such gift under which such power of appointment is to be construed as being defined in terms of, or by reference to, the amount of the exclusion under such section 2503(b) after its amendment by subsection (a),then the amendment made by subsection (a) shall not apply to such gift.”

Amendment by section 442(a)(3) of 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 1978 Amendment

Pub. L. 95–600, title VII, § 702(j)(3)(B), Nov. 6, 1978, 92 Stat. 2932, provided that: “The amendment made by paragraph (2) [amending this section] shall apply to transfers 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.

Plan Amendments Not Required Until January 1, 1989

For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title.

Notes of Decisions

Cited in 61 cases (4 in the last 5 years), 1956–2024 · leading case: Ratzlaf v. United States, 510 U.S. 135 (1994).

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Ratzlaf v. United States, 510 U.S. 135 (1994). · cites it 4× “In current days, as an amicus noted, countless taxpayers each year give a gift of $10,000 on December 31 and an identical gift the next day, thereby legitimately avoiding the taxable gifts reporting required by 26 U. S. C. § 2503 (b). [15] See Brief for National Association of…”

Dickman v. Comm'r, 465 U.S. 330 (1984). · cites it 2× “First, under § 2503(e) of the Code, 26 U. S. C. § 2503 (e) (1982 ed.), amounts paid on behalf of an individual for tuition at a qualified educational institution or for medical care are not considered "transfer[s] of property by gift" for purposes of the gift tax statutes.”

Whiting v. Whiting, 396 S.E.2d 413 (W. Va. 1990). · cites it 2× “Federal estate tax liabilities can be reduced further by other estate tax credits, and by gifts under the annual gift exclusion, 26 U.S.C. § 2503 (b) ($10,000 gift exclusion).”

In Re the Marriage of Royal, 107 S.W.3d 846 (Tex. App. 2003). · cites it 2× “See also 26 U.S.C. § 2503 (b)(1) (excluding from gift taxes the first $10,000 of gifts made to any person during a calendar year) (emphasis added).”

United States v. Irvine, 511 U.S. 224 (1994). · cites it 2× “, because a gift is chargeable against the current lifetime exemption, 26 U. S. C. § 2503 (b)). If this definition is thought to beg the question, the Government falls back to the argument that the predecessor regulation was not limited in application to interests derived from…”

Est. of Lydia G. Maxwell, Deceased First Nat'l Bank of Long Island Victor C. McCuaig Jr., Executors v. Comm'r of Internal Revenue, 3 F.3d 591 (1st Cir. 1993). · cites it 2× “The decedent took advantage of another tax benefit, the $10,000 per donee annual from the gift tax allowed during the years at issue, 26 U.S.C. § 2503 , by forgiving $20,000 of the principal amount owed by the Maxwells at the time of the sale and each year thereafter until she…”

Fred A. Berzon v. Comm'r of Internal Revenue, Gertrude Berzon v. Comm'r of Internal Revenue, 534 F.2d 528 (2d Cir. 1976). · cites it 2× “Berzon and Gertrude Berzon, 1 failed to qualify for the $3,000 annual gift tax exclusion under Title 26 U.S.C. § 2503 (b) of the Internal Revenue Code, and determining gift tax deficiencies of $19,276.”

Comm'r v. Est. of Hubert, 520 U.S. 93 (1997). · cites it 2× “26 U. S. C. § 2503 (b) (setting $10,000 annual minimum before gift tax liability attaches).”

Hatleberg v. Norwest Bank Wisconsin, 2005 WI 109 (Wis. 2005). “" 4 See 26 U.S.C. § 2503 (b) (2000) ("In the case of gifts (other than gifts of future interests in property) made to any person by *242 the donor during the calendar year, the first $10,000 of such gifts to such person shall not.”

United States v. Hemme, 476 U.S. 558 (1986). “See 26 U. S. C. § 2503 (b) (1970 ed.). To render the remaining $30,000 also exempt from tax, Hirschi elected to claim his entire, lifetime specific exemption.”

Maryland Nat'l Bank & Ralph Norris, Pers. Representatives of the Est. of Katherine L. N. Willis, Deceased v. United States, 609 F.2d 1078 (4th Cir. 1980). · cites it 2× “§ 2503(b), 26 U.S.C. § 2503 (b) (1976), and she sought to value the worth of the income interests by refer *1079 ence to the actuarial tables of Treas.”

D. Clifford Crummey v. Comm'r of Internal Revenue, 397 F.2d 82 (9th Cir. 1968). · cites it 2× “Each petitioner claimed a $3,000 per beneficiary tax exclusion un(jer provisions 0f 26 U.S.C. § 2503 (b). The total claimed exclusions were as fol- , lows : D.”

Show all 61 citing cases →

— 26 U.S.C. § 2503(b) — 2 cases

in the Interest of K.K.W., a Minor Child (Tex. App. 2018).

Lindsay v. Comm'r of Revenue, 253 N.W.2d 386 (Minn. 1977).

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.