2001(b)(2): Amounts are netted for gift and estate taxes
Subchapter A—Determination of Tax Liability
2501. Imposition of Tax
(a) Taxable Transfers-
(1) G/R- a tax, computed in Sec 2502, imposed each calendar year (“c/y”), on transfer of prop by gift during such c/y by any individual, resident, or nonresident.
(2) Tax not applied to Transfers of Intangible Prop by non-resident & non-citizen
2502. Rate of Tax
(a) Computation of Tax- tax imposed by 2501 shall be amount equal to the excess of- (1) A tentative tax, computed in Sec. 2001(c), on sum of gifts from c/y and each prior years, over (2) A tentative tax, on sum of taxable gifts for each prior years
(c) Tax to be Paid by Donor.- Tax in 2501 shall be paid by donor.
Gift Tax Calc. Estate Tax Formula
Gross Gifts Gross Estate
(Exclusions) -Annual Exclusions, Tuition, Medical (Deductions)
(Deductions) -Charitable, Marital Taxable Estate
C/Y Taxable Gifts +Taxable Gifts
+Prior Gifts Taxable Transfers
Tent. Taxable Gift on Cumulative Gifts Tentative Tax on Taxable Transfers
(Tax on Prior Gifts) (Gift Tax Payable)
Current Gift Tax Gross Estate Tax
(Available Gift Tax Credit) (Estate Tax)
Gift Tax Tax Due
2503. Taxable Gifts
(a) G/R- “taxable gifts” means gross gifts made during c/y, less dedns provided in Sub Chap C
(b) Exclusions from Gifts- Annual Exclusion $14,000
(c) Transfer for the Benefit of Minor- no part of gift to individual under 21 shall be considered a gift of future interest in property for purposes of SubSec (b) if property and the income from- 1) may be used by or for benefit of donee before turning 21, and 2) will to the extent no used— (A) pass to donee on turning 21 (B) event when donee dies before turning 21, payable to estate of donee or he may appoint under general power of appointment as defined in 2514(c).
(e) Exclusions of Transfers for Educational or Medical Expenses.—
(1) G/R- any qual transfer shall not be treated as transfer of prop by gift for purposes of this chapter
(2) Qualified Transfer- this section, ‘qualified transfer” means any amount paid on behalf of individual— (A) as tuition to educational organization (B) any persons who provide medical care payment
(f) Waiver of Certain Pension Rights.—individual can waive, before death of participant, any survivor benefit, or right to benefit, waiver shall not be treated as transfer of prop by gift for this chapter.
(g) Treatment of Certain Loans of Artwork—
(1) G/R- any loan of qual artwork shall not be treated as transfer (value determined if loan hasn’t been made) if-
(A) Such loan is to organization in 501(c)(3) and exempt from tax under 501(c) (other than priv. found)
(B) use of artwork is related to purpose or function consisting basis for exemption under 501(c)
2504. Taxable Gifts for Preceding Calendar Periods
(a) G/R- in computing taxable gifts for previous years—
(1) definition of gifts are dependent on respective years
(2) deductions allowed under such laws
(3) exemptions allowed under 2521 before 1/1/1977
(b) Exclusions from Gifts for Preceding C/P—amount of gifts that were excluded from gift tax will be shall not be included in the total amount of gifts made during such preceding c/p.
2505. Unified Credit Against Gift Tax.
(a) G/R- citizen or resident of US, allowed 1 credit from 2501 for each c/y, equal to—
(1) $5.34m, reduced by
(2) sum of amounts allowable as credit for all preceding c/p
Subchapter B. Transfers
2511. Transfers in General.
(a) Scope- Gift is dominion and control (trust, in/direct, real, personal, in/tangible). In case of nonresident not a us citizen, only property situated in US.
(b) Intangible Property- a non-resident/non-citizen of US who is excepted from 2501(a)(2)— (1) shares of stock issued by domestic corp., and (2) debt of obligations of— (a) a US person (b) the US, a State or politician subdivision thereof, or DC which are owned and held by such nonresident shall be deemed…