US Code

Public Law 119-73 (01/23/2026)

26 U.S.C. § 2501

Imposition of tax

(a)

Taxable transfers

(1)

General rule

A tax, computed as provided in section 2502, is hereby imposed for each calendar year on the transfer of property by gift during such calendar year by any individual resident or nonresident.

(2)

Transfers of intangible property

Except as provided in paragraph (3), paragraph (1) shall not apply to the transfer of intangible property by a nonresident not a citizen of the United States.

(3)

Exception

(A)

Certain individuals

Paragraph (2) shall not apply in the case of a donor to whom section 877(b) applies for the taxable year which includes the date of the transfer.

(B)

Credit for foreign gift taxes

The tax imposed by this section solely by reason of this paragraph shall be credited with the amount of any gift tax actually paid to any foreign country in respect of any gift which is taxable under this section solely by reason of this paragraph.

(4)

Transfers to political organizations

Paragraph (1) shall not apply to the transfer of money or other property to a political organization (within the meaning of section 527(e)(1)) for the use of such organization.

(5)

Transfers of certain stock

(A)

In general

In the case of a transfer of stock in a foreign corporation described in subparagraph (B) by a donor to whom section 877(b) applies for the taxable year which includes the date of the transfer—
(i)
section 2511(a) shall be applied without regard to whether such stock is situated within the United States, and
(ii)
the value of such stock for purposes of this chapter shall be its U.S.-asset value determined under subparagraph (C).
(B)

Foreign corporation described

A foreign corporation is described in this subparagraph with respect to a donor if—
(i)
the donor owned (within the meaning of section 958(a)) at the time of such transfer 10 percent or more of the total combined voting power of all classes of stock entitled to vote of the foreign corporation, and
(ii)
such donor owned (within the meaning of section 958(a)), or is considered to have owned (by applying the ownership rules of section 958(b)), at the time of such transfer, more than 50 percent of—
(I)
the total combined voting power of all classes of stock entitled to vote of such corporation, or
(II)
the total value of the stock of such corporation.
(C)

U.S.-asset value

For purposes of subparagraph (A), the U.S.-asset value of stock shall be the amount which bears the same ratio to the fair market value of such stock at the time of transfer as—
(i)
the fair market value (at such time) of the assets owned by such foreign corporation and situated in the United States, bears to
(ii)
the total fair market value (at such time) of all assets owned by such foreign corporation.
(6)

Transfers to certain exempt organizations

Paragraph (1) shall not apply to the transfer of money or other property to an organization described in paragraph (4), (5), or (6) of section 501(c) and exempt from tax under section 501(a), for the use of such organization.

(b)

Certain residents of possessions considered citizens of the United States

A donor who is a citizen of the United States and a resident of a possession thereof shall, for purposes of the tax imposed by this chapter, be considered a “citizen” of the United States within the meaning of that term wherever used in this title unless he acquired his United States citizenship solely by reason of (1) his being a citizen of such possession of the United States, or (2) his birth or residence within such possession of the United States.

(c)

Certain residents of possessions considered nonresidents not citizens of the United States

A donor who is a citizen of the United States and a resident of a possession thereof shall, for purposes of the tax imposed by this chapter, be considered a “nonresident not a citizen of the United States” within the meaning of that term wherever used in this title, but only if such donor acquired his United States citizenship solely by reason of (1) his being a citizen of such possession of the United States, or (2) his birth or residence within such possession of the United States.

(d)

Cross references

(1)
For increase in basis of property acquired by gift for gift tax paid, see section 1015(d).
(2)
For exclusion of transfers of property outside the United States by a nonresident who is not a citizen of the United States, see section 2511(a).

Aug. 16, 1954, ch. 73668A Stat. 403Pub. L. 85–866, title I72 Stat. 1641Pub. L. 86–779, § 4(d)74 Stat. 1000Pub. L. 89–809, title I, § 109(a)80 Stat. 1574Pub. L. 91–614, title I, § 102(a)(1)84 Stat. 1838Pub. L. 93–625, § 14(a)88 Stat. 2121Pub. L. 94–455, title XIX90 Stat. 1805Pub. L. 97–34, title IV, § 442(a)(1)95 Stat. 320Pub. L. 100–647, title III, § 3031(a)(2)102 Stat. 3635Pub. L. 101–508, title XI, § 11601(b)(2)104 Stat. 1388–490Pub. L. 104–191, title V, § 511(e)(2)110 Stat. 2098Pub. L. 105–34, title XVI, § 1602(g)(5)111 Stat. 1095Pub. L. 108–357, title VIII, § 804(d)118 Stat. 1571Pub. L. 114–113, div. Q, title IV, § 408(a)129 Stat. 3120(, ; , §§ 43(b), 102(b), , , 1674; , , ; , , ; , , ; , , ; , §§ 1902(a)(10), 1906(b)(13)(A), , , 1834; , , ; , , ; , , ; , (f)(2)(B), , , 2100; , , ; , , ; , , .)

Editorial Notes

Amendments

Pub. L. 114–1132015—Subsec. (a)(6). added par. (6).

Pub. L. 108–3572004—Subsec. (a)(3) to (5). added pars. (3) and (5), redesignated former par. (5) as (4), and struck out former pars. (3) and (4) which related to exception of certain individuals from taxable transfers and burden of proof.

Pub. L. 105–341997—Subsec. (a)(3)(C). substituted “donor” for “decedent”.

Pub. L. 104–191, § 511(e)(2)1996—Subsec. (a)(3). , substituted “Exception” for “Exceptions” in heading and amended text generally. Prior to amendment, text read as follows: “Paragraph (2) shall not apply in the case of a donor who at any time after , and within the 10-year period ending with the date of transfer lost United States citizenship unless—

8 U.S.C. 1401(b)“(A) such donor’s loss of United States citizenship resulted from the application of section 301(b), 350, or 355 of the Immigration and Nationality Act, as amended (, 1482, or 1487), or

“(B) such loss did not have for one of its principal purposes the avoidance of taxes under this subtitle or subtitle A.”

Pub. L. 104–191, § 511(f)(2)(B)Subsec. (a)(3)(E). , added subpar. (E).

Pub. L. 101–5081990—Subsec. (d)(3). struck out par. (3) which read as follows: “For treatment of certain transfers related to estate tax valuation freezes as gifts to which this chapter applies, see section 2036(c)(4).”

Pub. L. 100–6471988—Subsec. (d)(3). added par. (3).

Pub. L. 97–341981—Subsec. (a)(1), (4). substituted “calendar year” for “calendar quarter” wherever appearing.

Pub. L. 94–4551976—Subsec. (a)(1). inserted “for each calendar quarter” after “hereby imposed” and struck out “For the first calendar quarter of calendar year 1971 and each calendar quarter thereafter” after “General rule-”.

Pub. L. 94–455, § 1906(b)(13)(A)Subsec. (a)(4). , struck out “or his delegate” after “Secretary”.

Pub. L. 93–6251975—Subsec. (a)(5). added par. (5).

Pub. L. 91–614, § 102(a)(1)(A)1970—Subsec. (a)(1). , substituted “For the first calendar quarter of the calendar year 1971 and each calendar quarter thereafter” for “For the calendar year 1955 and each calendar year thereafter” and “during such calendar quarter” for “during such calendar year”.

Pub. L. 91–614, § 102(a)(1)(B)Subsec. (a)(4). , substituted “calendar quarter” for “calendar year”.

Pub. L. 89–8091966—Subsec. (a). redesignated existing provisions as par. (1), struck out “, except transfers of intangible property by a nonresident not a citizen of the United States and who was not engaged in business in the United States during such calendar year” after “resident or nonresident”, and added pars. (2) to (4).

Pub. L. 86–779, § 4(d)(2)1960—Subsec. (a). , struck out “who is” before “not a citizen”.

Pub. L. 86–779, § 4(d)(1)Subsecs. (c), (d). , added subsec. (c) and redesignated former subsec. (c) as (d).

Pub. L. 85–866, § 102(b)1958—Subsec. (b). , added subsec. (b) and redesignated former subsec. (b) as (c).

Pub. L. 85–866, § 102(b)Pub. L. 85–866, § 43(b)Subsec. (c). , redesignated former subsec. (b) as (c) and , made the heading read in the plural, designated existing provisions as par. (2) and added par. (1).

Statutory Notes and Related Subsidiaries

Effective Date of 2015 Amendment

Pub. L. 114–113, div. Q, title IV, § 408(b)129 Stat. 3121

“The amendment made by subsection (a) [amending this section] shall apply to gifts made after the date of the enactment of this Act [].”
, , , provided that:

Effective Date of 2004 Amendment

Pub. L. 108–357section 804(f) of Pub. L. 108–357section 877 of this titleAmendment by applicable to individuals who expatriate after , see , set out as a note under .

Effective Date of 1997 Amendment

Pub. L. 105–34Pub. L. 104–191section 1602(i) of Pub. L. 105–34section 26 of this titleAmendment by effective as if included in the provisions of the Health Insurance Portability and Accountability Act of 1996, , to which such amendment relates, see , set out as a note under .

Effective Date of 1996 Amendment

Pub. L. 104–191section 511(g) of Pub. L. 104–191section 877 of this titleAmendment by applicable to individuals losing United States citizenship on or after , and to long-term residents of the United States with respect to whom an event described in section 877(e)(1)(A) or (B) of this title occurs on or after , with special rule for certain individuals who performed an act of expatriation specified in section 1481(a)(1)–(4) of Title 8, Aliens and Nationality, before , see , set out as a note under .

Effective Date of 1990 Amendment

Pub. L. 101–508section 11601(c) of Pub. L. 101–508section 2036 of this titleAmendment by applicable in the case of property transferred after , see , set out as a note under .

Effective Date of 1988 Amendment

Pub. L. 100–647section 2036(c)(1)(B) of this titlesection 3031(h)(2) of Pub. L. 100–647section 2036 of this titleAmendment by applicable in cases where transfer referred to in is on or after , see , set out as a note under .

Effective Date of 1981 Amendment

Pub. L. 97–34, title IV, § 442(e)95 Stat. 323

“The amendments made by this section [amending this section and sections 1015, 2502, 2503, 2504, 2505, 2512, 2513, 2522, 6019, 6075, and 6212 of this title] shall apply with respect to gifts made after .”
, , , provided that:

Effective Date of 1976 Amendment

Pub. L. 94–455, title XIX, § 1902(c)(2)90 Stat. 1806Pub. L. 95–600, title VII, § 703(j)(12)92 Stat. 2942

“The amendments made by paragraphs (10), (11), and (12)(D) and (E) of subsection (a) [amending this section and sections 2522 and 2523 of this title] shall apply with respect to gifts made after .”
, , , as amended by , , , provided that:

Effective Date of 1975 Amendment

Pub. L. 93–625, § 14(b)88 Stat. 2121

“The amendment made by subsection (a) [amending this section] shall apply to transfers made after .”
, , , provided that:

Effective Date of 1970 Amendment

Pub. L. 91–614, title I, § 102(e)84 Stat. 1842

“The amendments made by this section [amending this section and sections 1015, 2012, 2502, 2503, 2504, 2512, 2513, 2515, 2521, 2522, 2523, 6019, 6075, 6212, 6214, 6324, 6501, and 6512 of this title and enacting provisions set out as a note under this section] shall apply with respect to gifts made after .”
, , , provided that:

Effective Date of 1966 Amendment

Pub. L. 89–809, title I, § 109(c)80 Stat. 1575

section 2511 of this title“The amendments made by this section [amending this section and ] shall apply with respect to the calendar year 1967 and all calendar years there­after.”
, , , provided that:

Effective Date of 1960 Amendment

Pub. L. 86–779, § 4(e)(3)74 Stat. 1000

“The amendments made by subsection (d) [amending this section] shall apply with respect to gifts made after the date of the enactment of this Act [].”
, , , provided that:

Effective Date of 1958 Amendment

Pub. L. 85–866section 102(d) of Pub. L. 85–866section 2014 of this titleAmendment by applicable to gifts made after , see , set out as a note under .

Construction of 2015 Amendment

Pub. L. 114–113, div. Q, title IV, § 408(c)129 Stat. 3121

“Nothing in the amendment made by subsection (a) [amending this section] shall be construed to create any inference with respect to whether any transfer of property (whether made before, on, or after the date of the enactment of this Act []) to an organization described in paragraph (4), (5), or (6) of section 501(c) of the Internal Revenue Code of 1986 is a transfer of property by gift for purposes of chapter 12 of such Code.”
, , , provided that:

Election To Have Amendments by Title IV of the Economic Recovery Tax Act of 1981 Not Apply

Pub. L. 97–448, title I, § 104(d)(3)96 Stat. 2383Pub. L. 99–514, § 2100 Stat. 2095

“(A)
In the case of any decedent—
“(i)
who dies before , and
“(ii)
who made a gift (before , and during the 3-year period ending on the date of the decedent’s death) on which tax imposed by chapter 12 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] has been paid before ,
Pub. L. 97–34, title IVsuch decedent’s executor may make an election to have subtitle B of such Code (relating to estate and gift taxes) applied with respect to such decedent without regard to any of the amendments made by title IV of the Economic Recovery Tax Act of 1981 [].
“(B)
An election under subparagraph (A) shall be made at such time and in such manner as the Secretary of the Treasury or his delegate shall prescribe.
“(C)
An election under subparagraph (A), once made, shall be irrevocable.”
, , , as amended by , , , provided that: