To determine the gross estate for federal estate tax purposes, find the total of the value of the following (as of the appropriate valuation date):
All property owned by an individual at the time of death is included in the computation of the gross estate. Property is included if it was beneficially owned by the decedent at the time of his or her death, and it was transferred at death by the decedent's will or by state intestacy laws. All types of property owned by a decedent outright at death, whether real or personal property (both tangible and intangible) are included.Additionally, the right to future income earned, but not received, prior to a decedent's death is a property interest entitled income in respect of a decedent that will be included in the decedent's estate. I.R.C. Section 2031.
If an estate owner, during lifetime, transferred property as a gift, the value of that property will be included in the donor's gross estate if the donor retained, for the donor's life: (a) a life estate; (b) the possession, enjoyment, or right to income from the property; or (c) the right to specify who will possess or enjoy either the property itself or the income it produces. I.R.C. Section 2036.
If the decedent made a transfer of property during lifetime, but retained a power (alone or in conjunction with others) to alter, amend, revoke, or terminate the gift, the value of the property subject to that power (not the entire value of the transfer of property) will be included in the gross estate. I.R.C. Section 2038.
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