Taxation of Estates and Gifts

Revocable Transfer


A decedent's gross estate includes any property given away but still subject to the decedent's power to alter, amend, revoke, or terminate. 26 U.S.C. § 2038.

This amount must be discounted to the amount of time after decedent's death that it will be until the remainder transfers by multiplying it by the corresponding "remainder" value in 26 U.S.C. § 7520 Table S or B.

Immaterial

A condition being immaterial means that the condition does not matter. The result is the same whether the condition is present or not.

Immaterial Table
Condition Immaterial under Section 2036 Immaterial under Section 2038
Joint Power, i.e., act of D and another person is necessary to exercise the power ✔ Treas. Reg. § 20.2036-1(b)(3) text(i) ✔ Treas. Reg. § 20.2038-1(a)
Capacity, i.e., D holds power as a fiduciary, like a trustee ✔ Treas. Reg. § 20.2036-1(b)(3) text(ii) ✔ Treas. Reg. § 20.2038-1(a)
Contingency beyond D’s control is condition precedent to D’s having the power ✔ Treas. Reg. § 20.2036-1(b)(3) text(iii) ❌ Treas. Reg. § 20.2038-1(b)
Contingency within D’s control is condition precedent to D’s having the power ✔ Implied from Treas. Reg. § 20.2036-1(b)(3) text(iii) ✔ Implied from Treas. Reg. § 20.2038-1(b)
Power relates only to time and manner of enjoyment, e.g. income and remainder beneficiary is the same person ❌ Implied from Treas. Reg. § 20.2036-1(b)(3) text(iii)

Money may be included in both §§ 2036 & 2038, so just pick the larger of the two values.