Page:United States Statutes at Large Volume 92 Part 3.djvu/299

 PUBLIC LAW 95-600—NOV. 6, 1978

92 STAT. 2931

"(e) COORDINATION OF SECTIONS 2513 AND 2035.—If—

26 USC 2513,

"(1) the decedent's spouse was the donor of any gift one-half of 2035. which was considered under section 2513 as made by the dece- 26 USC 2513. dent, and "(2) the amount of such gift is includible in the gross estate of the decedent's spouse by reason of section 2035, 26 USC 2035. such gift shall not be included in the adjusted taxable gifts of the decedent for purposes of subsection (b)(1)(B), and the aggregate amount determined under subsection (b)(2) shall be reduced by the amount (if any) determined under subsection (d) which was treated as a tax payable by the decedent's spouse with respect to such gift." (2) CONFORMING AMENDMENT.—Subparagraph (C) of section

2602(a)(1) (relating to amount of tax on generation-skipping transfers) is amended by striking out "section 2001(b))" and inserting in lieu thereof "section 2001(b), as modified by section 2001(e))". (3) EFFECTIVE DATE.—The amendments made by this subsection shall apply with respect to the estates of decedents dying after December 31, 1976, except that such amendments shall not apply to transfers made before January 1, 1977.

26 USC 2602. 26 USC 2001. 26 USC 2001 note.

(i) INCLUSION IN GROSS ESTATE OF STOCK TRANSFERRED BY THE DECEDENT WHERE THE DECEDENT RETAINS OR ACQUIRES VOTING RIGHTS.—

(1) IN GENERAL.—Section 2036 (relating to transfers with 26 USC 2036. retained life estate) is amended by redesignating subsection (b) as subsection (c) and by inserting after subsection (a) the following new subsection: "Ob) VOTING RIGHTS.—

"(1) IN GENERAL.—For purposes of subsection (a)(1), the retention of the right to vote (directly or indirectly) shares of stock of a controlled corporation shall be considered to be a retention of the enjoyment of transferred property. ' '(2) CONTROLLED CORPORATION.—For purposes of paragraph (1),

a corporation shall be treated as a controlled corporation if, at any time after the transfer of the property and during the 3-year period ending on the date of the decedent's death, the decedent owned (with the application of section 318), or had the right (either alone or in conjunction with any person) to vote, stock possessing at least 20 percent of the total combined voting power of all classes of stock. "(3) COORDINATION WITH SECTION 2035.—For purposes of applying section 2035 with respect to paragraph (1), the relinquishment or cessation of voting rights shall be treated as a transfer of property made by the decedent." (2) CONFORMING AMENDMENT.—Subsection (a) of section 2036 is amended by striking out the last sentence thereof. (3) EFFECTIVE DATE.—The amendments made by this subsection shall apply to transfers made after June 22, 1976.

26 USC 318.

26 USC 2035. 26 USC 2036. 26 USC 2036 note.

(j) AMENDMENTS RELATING TO INDIVIDUAL RETIREMENT ACCOUNTS, ETC., FOR SPOUSE.— (1) APPLICATION OF ESTATE TAX EXCLUSION TO INDIVIDUAL

RETIREMENT ACCOUNTS, ETC., FOR SPOUSE.—Subsection (e) of Section 2039 (relating to exclusion of individual retirement ac- 26 USC 2039. counts, etc.) is amended by striking out "section 219" each place 26 USC 219. it appears and inserting in lieu thereof "section 219 or 220". 26 USC 219, (2) TRANSFERS TO INDIVIDUAL RETIREMENT ACCOUNTS, ETC., FOR 220. SPOUSE TREATED AS TRANSFERS OF PRESENT INTERESTS.—SeCtion

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