Page:United States Statutes at Large Volume 63 Part 1.djvu/933

 63 STAT.] 81ST CONG. , 1ST SESS.-CH. 720-OCT. 25, 1949 the property, or (ii) the right, either alone or in conjunction with any person, to designate the persons who shall possess or enjoy the property or the income therefrom; or "(C) intended to take effect in possession or enjoyment at or after his death. " (2) TRANSFERS TAKING EFFECT AT DEATH-TRANSFERS PRIOR TO OCTOBER 8, 1949. -An interest in property of which the decedent made a transfer, on or before October 7, 1949, intended to take effect in possession or enjoyment at or after his death shall not be included in his gross estate under paragraph (1) (C) of this sub- section unless the decedent has retained a reversionary interest in the property, arising by the express terms of the instrument of transfer and not by operation of law, and the value of such rever- sionary interest immediately before the death of the decedent exceeds 5 per centum of the value of such property. For the pur- poses of this paragraph, the term 'reversionary interest' includes a possibility that property transferred by the decedent (A) may return to him or his estate, or (B) may be subject to a power of disposition by him, but such term does not include a possibility that the income alone from such property may return to him or become subject to a power of disposition by him. The value of a reversionary interest immediately before the death of the decedent shall be determined (without regard to the fact of the decedent's death) by usual methods of valuation, including the use of tables of mortality and actuarial principles, pursuant to regulations pre- scribed by the Commissioner with the approval of the Secretary. In determining the value of a possibility that property may be subject to a power of disposition by the decedent, such possibility shall be valued as if it were a possibility that such property may return to the decedent or his estate. " (3) TRANSFERS TAKING EFFECT AT DEATH---TRANSFERS AFTER OCTOBER 7, 1949.-An interest in property transferred by the decedent after October 7, 1949, shall be included in his gross estate under paragraph (1) (C) of this subsection (whether or not the decedent retained any right or interest in the property trans- ferred) if and only if- "(A) possession or enjoyment of the property can, through ownership of such interest, be obtained only by surviving the decedent; or "(B) under alternative contingencies provided by the terms of the transfer, possession or enjoyment of the property can, through ownership of such interest, be obtained only by surviving the earlier to occur of (i) the decedent's death or (ii) some other event; and such other event did not in fact occur during the decedent's life. Notwithstanding the foregoing sentence, an interest so transferred shall not be included in the decedent's gross estate under para- graph (1) (C) of this subsection if possession or enjoyment of the property could have been obtained by any beneficiary during the decedent's life through the exercise of a power of appointment (as defined in section 811 (f) (2)) which in fact was exercisable immediately prior to the decedent's death." (b) The amendment made by subsection (a) shall be applicable with respect to estates of decedents dying after February 10, 1939. The provisions of section 811 (c) of the Internal Revenue Code, as amended by subsection (a), shall (except as otherwise specifically provided in such section or in the following sentence) apply to transfers made on, before, or after February 26, 1926. The provisions of section 811 (c) 895 53 Stat. 122 . 26U. .c.1811(0 (2). Ante, p. 84.

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