26 U.S.C. § 691
Recipients of income in respect of decedents
If a right, described in paragraph (1), to receive an amount is transferred by the estate of the decedent or a person who received such right by reason of the death of the decedent or by bequest, devise, or inheritance from the decedent, there shall be included in the gross income of the estate or such person, as the case may be, for the taxable period in which the transfer occurs, the fair market value of such right at the time of such transfer plus the amount by which any consideration for the transfer exceeds such fair market value. For purposes of this paragraph, the term “transfer” includes sale, exchange, or other disposition, or the satisfaction of an installment obligation at other than face value, but does not include transmission at death to the estate of the decedent or a transfer to a person pursuant to the right of such person to receive such amount by reason of the death of the decedent or by bequest, devise, or inheritance from the decedent.
The right, described in paragraph (1), to receive an amount shall be treated, in the hands of the estate of the decedent or any person who acquired such right by reason of the death of the decedent, or by bequest, devise, or inheritance from the decedent, as if it had been acquired by the estate or such person in the transaction in which the right to receive the income was originally derived and the amount includible in gross income under paragraph (1) or (2) shall be considered in the hands of the estate or such person to have the character which it would have had in the hands of the decedent if the decedent had lived and received such amount.
In any case to which the first sentence of paragraph (2) applies by reason of subparagraph (A), if the decedent and the obligor were related persons (within the meaning of section 453(f)(1)), the fair market value of the installment obligation shall be treated as not less than its face amount.
For purposes of subparagraph (A), an installment obligation which becomes unenforceable shall be treated as if it were canceled.
In the case of the deduction specified in section 611, to the person described in subsection (a)(1)(A), (B), or (C) who, in the manner described therein, receives the income to which the deduction relates, in the taxable year when such income is received.
A person who includes an amount in gross income under subsection (a) shall be allowed, for the same taxable year, as a deduction an amount which bears the same ratio to the estate tax attributable to the net value for estate tax purposes of all the items described in subsection (a)(1) as the value for estate tax purposes of the items of gross income or portions thereof in respect of which such person included the amount in gross income (or the amount included in gross income, whichever is lower) bears to the value for estate tax purposes of all the items described in subsection (a)(1).
In the case of an estate or trust, the amount allowed as a deduction under subparagraph (A) shall be computed by excluding from the gross income of the estate or trust the portion (if any) of the items described in subsection (a)(1) which is properly paid, credited, or to be distributed to the beneficiaries during the taxable year.
In the case of any tax imposed by chapter 13 on a taxable termination or a direct skip occurring as a result of the death of the transferor, there shall be allowed a deduction (under principles similar to the principles of this subsection) for the portion of such tax attributable to items of gross income of the trust which were not properly includible in the gross income of the trust for periods before the date of such termination.
For purposes of sections 1(h), 1202, and 1211, the amount taken into account with respect to any item described in subsection (a)(1) shall be reduced (but not below zero) by the amount of the deduction allowable under paragraph (1) of this subsection with respect to such item.
For application of this section to income in respect of a deceased partner, see section 753.
2017—Subsec. (c)(4). Pub. L. 115–97 struck out “1201,” after “1(h),”.
2014—Subsec. (d)(1)(A). Pub. L. 113–295 struck out “after
2004—Subsec. (c)(4). Pub. L. 108–311 struck out “of any gain” before “taken into account”.
1997—Subsec. (c)(1)(C). Pub. L. 105–34 struck out heading and text of subpar. (C). Text read as follows: “For purposes of this subsection, no deduction shall be allowed for the portion of the estate tax attributable to the increase in such tax under section 4980A(d).”
1996—Subsec. (c)(5). Pub. L. 104–188, § 1704(t)(73), provided that section 521(b)(27) of Pub. L. 102–318 shall be applied as if “Section 691(c)(5)” appeared instead of “Section 691(c)”. See 1992 Amendment note below.
Pub. L. 104–188, § 1401(b)(9), struck out par. (5) which read as follows:
“(5)
1993—Subsec. (c)(4). Pub. L. 103–66 inserted “1202,” after “1201,”.
1992—Subsec. (c)(5). Pub. L. 102–318, which directed that section 691(c) be amended “in the text and heading” by substituting “402(d)” for “402(e)”, was executed by making the substitution in subsec. (c)(5). See 1996 Amendment note above.
1990—Subsec. (c)(4). Pub. L. 101–508 substituted “1(h)” for “1(j)”.
1989—Subsec. (c)(5). Pub. L. 101–239 substituted “paragraph (1)(C)” for “paragraph (1)(D)”.
1988—Subsec. (c)(1)(C). Pub. L. 100–647 added subpar. (C).
1987—Subsec. (a)(4), (5)(A). Pub. L. 100–203 struck out “or 453A” after “section 453”.
1986—Subsec. (c)(3). Pub. L. 99–514, § 1432(a)(3), amended par. (3) generally. Prior to amendment, par. (3) read as follows: “For purposes of this section—
“(A) the tax imposed by section 2601 or any State inheritance tax described in section 2602(c)(5)(B) on any generation-skipping transfer shall be treated as a tax imposed by section 2001 on the estate of the deemed transferor (as defined in section 2612(a));
“(B) any property transferred in such a transfer shall be treated as if it were included in the gross estate of the deemed transferor at the value of such property taken into account for purposes of the tax imposed by section 2601; and
“(C) under regulations prescribed by the Secretary, any item of gross income subject to the tax imposed under section 2601 shall be treated as income described in subsection (a) if such item is not properly includible in the gross income of the trust on or before the date of the generation-skipping transfer (within the meaning of section 2611(a)) and if such transfer occurs at or after the death of the deemed transferor (as so defined).”
Subsec. (c)(4). Pub. L. 99–514, § 301(b)(8), substituted “capital gain provisions” for “capital gain deduction, etc.” in heading and in text substituted “1(j), 1201, and 1211” for “1201, 1202, and 1211, and for purposes of section 57(a)(9)”.
1984—Subsec. (b). Pub. L. 98–369 substituted “section 27” for “section 33” in provisions preceding par. (1) and in provisions of par. (1) preceding subpar. (A).
1981—Subsec. (c)(3)(A). Pub. L. 97–34 substituted “section 2602(c)(5)(B)” for “section 2602(c)(5)(C)”.
1980—Subsec. (a)(4). Pub. L. 96–471, § 2(b)(5), substituted “reportable by the decedent on the installment method under section 453 or 453A” for “received by a decedent on the sale or other disposition of property, the income from which was properly reportable by the decedent on the installment basis under section 453” in text preceding subpar. (A) and “section 453B” for “section 453(d)” in subpars. (A) and (B).
Subsec. (a)(5). Pub. L. 96–471, § 3, added par. (5).
Subsec. (c)(2)(A), (C). Pub. L. 96–223 repealed the amendments made by Pub. L. 94–455, § 2005(a)(4). See 1976 Amendment notes below.
Subsec. (c)(5). Pub. L. 96–222 added par. (5).
1978—Subsec. (c)(4). Pub. L. 95–600 added par. (4).
1976—Subsec. (c)(1)(B). Pub. L. 94–455, § 1901(a)(91), struck out provision that this subparagraph applies to same taxable years, and to same extent, as is provided in section 683 of this title.
Subsec. (c)(2)(A). Pub. L. 94–455, § 2005(a)(4)(A), substituted “Federal and State estate taxes (within the meaning of section 1023(f)(3))” for “the tax imposed on the estate of the decedent or any prior decedent under section 2001 or 2101, reduced by the credits against such tax”. See Repeals note below.
Subsec. (c)(2)(C). Pub. L. 94–455, § 2005(a)(4)(B), substituted “which bears the same ratio to the estate tax as such net value bears to the value of the gross estate” for “equal to the excess of the estate tax over the estate tax computed without including in the gross estate such net value”. See Repeals note below.
Subsec. (c)(3). Pub. L. 94–455, § 2006(b)(3), added par. (3).
Subsec. (d)(3)(A), (B). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
Subsecs. (e), (f). Pub. L. 94–455, § 1951(b)(10)(A), redesignated subsec. (f) as (e) and struck out former subsec. (e) relating to certain installment obligations transmitted at death.
1964—Subsec. (c)(2)(B). Pub. L. 88–272 substituted “421(c)(2), relating to the deduction for estate tax with respect to stock options to which part II of subchapter D applies” for “421(d)(6)(B), relating to the deduction for estate tax with respect to restricted stock options”.
Subsecs. (e), (f). Pub. L. 88–570 added subsec. (e) and redesignated former subsec. (e) as (f).
Amendment by Pub. L. 115–97 applicable to taxable years beginning after
Amendment by Pub. L. 113–295 effective
Amendment by Pub. L. 108–311 effective as if included in section 302 of the Jobs and Growth Tax Relief Reconciliation Act of 2003, Pub. L. 108–27, see section 402(b) of Pub. L. 108–311, set out a note under section 1 of this title.
Amendment by Pub. L. 105–34 applicable to estates of decedents dying after
Amendment by section 1401(b)(9) of Pub. L. 104–188 applicable to taxable years beginning after
Amendment by Pub. L. 103–66 applicable to stock issued after
Amendment by Pub. L. 102–318 applicable to distributions after
Amendment by Pub. L. 101–508 applicable to taxable years beginning after
Amendment by 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.
Amendment by Pub. L. 100–203 applicable to dispositions in taxable years beginning after
Amendment by section 301(b)(8) of Pub. L. 99–514 applicable to taxable years beginning after
Amendment by section 1432(a)(3) of Pub. L. 99–514 applicable to generation-skipping transfers (within the meaning of section 2611 of this title) made after
Amendment by Pub. L. 98–369 applicable to taxable years beginning after
Amendment by Pub. L. 97–34 applicable to estates of decedents dying after
For effective date of amendment by section 2(b)(5) of Pub. L. 96–471, see section 6(a)(1) of Pub. L. 96–471, set out as an Effective Date note under section 453 of this title.
Pub. L. 96–471, § 6(b),
Amendment by Pub. L. 96–223 (repealing section 2005(a)(4) of Pub. L. 94–455 and the amendments made thereby, which had amended this section) applicable in respect of decedents dying after
Pub. L. 96–222, title I, § 101(b)(1)(D),
Pub. L. 95–600, title VII, § 702(b)(2),
Amendment by section 1901(a)(91) of Pub. L. 94–455 effective for taxable years beginning after
Amendment by section 1951(b)(10)(A) of Pub. L. 94–455 effective for taxable years beginning after
Amendment by section 2005(a)(4)(A), (B) of Pub. L. 94–455 applicable in respect of decedents dying after
For effective date of amendment by section 2006(b)(3) of Pub. L. 94–455, see section 2006(c) of Pub. L. 94–455, set out as an Effective Date note under section 2601 of this title.
Amendment by Pub. L. 88–272 applicable to taxable years ending after
Pub. L. 94–455, § 2005(a)(4), cited as a credit to this section, and the amendments made thereby, were repealed by Pub. L. 96–223, title IV, § 401(a), 94 Stat. 299, resulting in the text of this section reading as it read prior to enactment of section 2005(a)(4). See Effective Date of 1980 Amendments and Revival of Prior Law note above.
Pub. L. 94–455, title XIX, § 1951(b)(10)(B),
For provisions directing that if any amendments made by subtitle D [§§ 1401–1465] of title I of Pub. L. 104–188 require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after
For provisions directing that if any amendments made by subtitle B [§§ 521–523] of title V of Pub. L. 102–318 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