1 2 3 4 5 CO 6 20 "(1) IN GENERAL.-For purposes of this chapter, the transfer of an interest in property with respect to which there is 1 or more term interests shall be treated as a transfer of an interest in a trust. "(2) JOINT PURCHASES.-If 2 or more members of the same family acquire interests in any property de 7 scribed in paragraph (1) in the same transaction (or a series of related transactions), the person (or persons) acquiring the term interests in such property shall be treated as having acquired the entire property and then transferred to the other persons the interests acquired by such other persons in the transaction (or series of transactions). "(3) TERM INTEREST.-For purposes of this sub section, the term 'term interest' means years. "(A) a life interest in property, or "(B) an interest in property for a term of "(4) VALUATION RULE FOR CERTAIN TERM INTERESTS.-If the nonexercise of rights under a term interest in tangible property would not have a substantial effect on the valuation of the remainder interest in such property "(A) subparagraph (A) of section 2701(a)(2) shall not apply to such term interest, and 1 2 3 4 5 6 21 "(B) the value of such term interest for pur poses of applying section 2701(a)(1) shall be the amount which the holder of the term interest es tablishes as the amount for which such interest could be sold to an unrelated third party. "(e) OTHER DEFINITIONS AND SPECIAL RULES.-For 7 purposes of this chapter 8 9 10 11 12 13 14 15 16 17 18 19. 20 21 22 23 24 "(1) 10-PERCENT OWNED ENTITY. "(A) IN GENERAL.-The term '10-percent owned entity' means— "(i) any corporation if 10 percent or more of the value of the stock in such corpo ration is held (directly or indirectly) by the transferor, "(ii) any partnership if 10 percent or more of the value of the capital or profits in terest in such partnership is held (directly or indirectly) by the transferor, and "(iii) any trust if 10 percent or more of the value of the beneficial interests in such trust is held (directly or indirectly) by the transferor. For purposes of the preceding sentence, the trans feror shall be treated as holding any interest in an 22 entity held (directly or indirectly) by any member of the transferor's family. "(B) FAMILY TO INCLUDE SIBLINGS.Solely for purposes of subparagraph (A), any brother or sister of the transferor and any spouse of a brother or sister of the transferor shall be treated as a member of the transferor's family. "(2) SPECIALLY VALUED RETAINED INTEREST.-The term 'specially valued retained interest' means any retained interest if the value of such interest was determined under subparagraph (A) or (B) of subsection (a)(2) of section 2701 for purposes of applying section 2701(a)(1) to any transfer. "(3) TREATMENT OF CREDITOR AND LESSOR INTERESTS.—Any right to receive payments from a 10percent owned entity under any indebtedness or lease shall be treated as an interest in such entity. "(4) TREATMENT OF TRANSFERS OF INTERESTS IN PORTION OF TRUST.-In the case of a transfer of an income or remainder interest with respect to a specified portion of the property in a trust, only such portion shall be taken into account in applying this chap ter to such transfer. 23 1 "(f) REGULATIONS.-The Secretary shall prescribe 2 such regulations as may be appropriate to carry out the pur 3 poses of this chapter, including 4 5 6 7 8 9 10 11 12 13 14 15 "(1) regulations providing appropriate adjustments in the application of subsections (c) and (d) of section 2701 where the transferor holds junior equity interests in the entity, "(2) regulations providing for the proper treatment of improvements (or other changes) in the case of property to which subsection (d)(4) of this section applied, and “(3) regulations providing for such reporting requirements as may be appropriate to carry out the purposes of this chapter." (b) TECHNICAL AMENDMENT.-Section 1015 (relating 16 to basis of property acquired by gift) is amended by adding at 17 the end thereof the following new subsection: 18 "(f) SPECIAL VALUATION RULES TO APPLY.-The 19 rules of chapter 14 shall apply in determining the fair market 20 value of any property at the time of the gift for purposes of 21 this section." 22 (c) CLERICAL AMENDMENT.-The table of chapters for 23 subtitle B is amended by adding at the end thereof the follow 24 ing new item: "Chapter 14. Special valuation rules.” 24 1 (d) EFFECTIVE DATE.—The amendments made by this 2 section shall apply in the case of transfers after 3 4 SEC. 5 EXTENSION OF STATUTE OF LIMITATIONS. (a) IN GENERAL.-Subsection (a) of section 6501 (relat 6 ing to limitations on assessment and collection) is amended 7 by adding at the end thereof the following new sentence: "In 8 the case of any tax imposed by chapter 12 with respect to a 9 transfer of property the value of which is determined under 10 section 2701, the preceding sentence shall be applied by sub11 stituting '6 years' for '3 years' the first place it appears.". 12 (b) UNLIMITED EXTENSION FOR CERTAIN GIFTS NOT 13 SHOWN ON RETURN.-Subsection (c) of section 6501 is 14 amended by adding at the end thereof the following new 15 paragraph: "(9) GIFT TAX ON CERTAIN GIFTS NOT SHOWN ON RETURN.-If any gift of property the value of which is determined under section 2701 is required to be shown on a return of tax imposed by chapter 12 is not shown on such return, any tax imposed by chapter 12 on such gift may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time. The preceding sentence shall not apply to any item not shown as a gift on such return if such item is disclosed in such return, or in a 33-144 0 - 90 - 2 |