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Last Updated: January 8, 2012

-STATUTE

(a) In general
      If, during any calendar year, any United States citizen or
    resident receives any covered gift or bequest, there is hereby
    imposed a tax equal to the product of - 
        (1) the highest rate of tax specified in the table contained in
      section 2001(c) as in effect on the date of such receipt (or, if
      greater, the highest rate of tax specified in the table
      applicable under section 2502(a) as in effect on the date), and
        (2) the value of such covered gift or bequest.
    (b) Tax to be paid by recipient
      The tax imposed by subsection (a) on any covered gift or bequest
    shall be paid by the person receiving such gift or bequest.
    (c) Exception for certain gifts
      Subsection (a) shall apply only to the extent that the value of
    covered gifts and bequests received by any person during the
    calendar year exceeds the dollar amount in effect under section
    2503(b) for such calendar year.
    (d) Tax reduced by foreign gift or estate tax
      The tax imposed by subsection (a) on any covered gift or bequest
    shall be reduced by the amount of any gift or estate tax paid to a
    foreign country with respect to such covered gift or bequest.
    (e) Covered gift or bequest
      (1) In general
        For purposes of this chapter, the term "covered gift or
      bequest" means - 
          (A) any property acquired by gift directly or indirectly from
        an individual who, at the time of such acquisition, is a
        covered expatriate, and
          (B) any property acquired directly or indirectly by reason of
        the death of an individual who, immediately before such death,
        was a covered expatriate.
      (2) Exceptions for transfers otherwise subject to estate or gift
        tax
        Such term shall not include - 
          (A) any property shown on a timely filed return of tax
        imposed by chapter 12 which is a taxable gift by the covered
        expatriate, and
          (B) any property included in the gross estate of the covered
        expatriate for purposes of chapter 11 and shown on a timely
        filed return of tax imposed by chapter 11 of the estate of the
        covered expatriate.
      (3) Exceptions for transfers to spouse or charity
        Such term shall not include any property with respect to which
      a deduction would be allowed under section 2055, 2056, 2522, or
      2523, whichever is appropriate, if the decedent or donor were a
      United States person.
      (4) Transfers in trust
        (A) Domestic trusts
          In the case of a covered gift or bequest made to a domestic
        trust - 
            (i) subsection (a) shall apply in the same manner as if
          such trust were a United States citizen, and
            (ii) the tax imposed by subsection (a) on such gift or
          bequest shall be paid by such trust.
        (B) Foreign trusts
          (i) In general
            In the case of a covered gift or bequest made to a foreign
          trust, subsection (a) shall apply to any distribution
          attributable to such gift or bequest from such trust (whether
          from income or corpus) to a United States citizen or resident
          in the same manner as if such distribution were a covered
          gift or bequest.
          (ii) Deduction for tax paid by recipient
            There shall be allowed as a deduction under section 164 the
          amount of tax imposed by this section which is paid or
          accrued by a United States citizen or resident by reason of a
          distribution from a foreign trust, but only to the extent
          such tax is imposed on the portion of such distribution which
          is included in the gross income of such citizen or resident.
          (iii) Election to be treated as domestic trust
            Solely for purposes of this section, a foreign trust may
          elect to be treated as a domestic trust. Such an election may
          be revoked with the consent of the Secretary.
    (f) Covered expatriate
      For purposes of this section, the term "covered expatriate" has
    the meaning given to such term by section 877A(g)(1).

-SOURCE

(Added Pub. L. 110-245, title III, Sec. 301(b)(1), June 17, 2008,
    122 Stat. 1644.)

-MISC1

EFFECTIVE DATE                          
      Pub. L. 110-245, title III, Sec. 301(g), June 17, 2008, 122 Stat.
    1647, provided that:
      "(1) In general. - Except as provided in this subsection, the
    amendments made by this section [enacting this chapter and section
    877A of this title and amending sections 877, 6039G, and 7701 of
    this title] shall apply to any individual whose expatriation date
    (as so defined) is on or after the date of the enactment of this
    Act [June 17, 2008].
      "(2) Gifts and bequests. - Chapter 15 of the Internal Revenue
    Code of 1986 (as added by subsection (b)) shall apply to covered
    gifts and bequests (as defined in section 2801 of such Code, as so
    added) received on or after the date of the enactment of this Act
    from transferors (or from the estates of transferors) whose
    expatriation date is on or after such date of enactment."