CODIFICATION OF INTERNAL REVENUE LAWS (b) REIMBURSEMENT OUT OF ESTATE.-If the tax or any part thereof is paid by, or collected out of that part of the estate passing to or in the possession of, any person other than the executor in his capacity as such, such person shall be entitled to reimbursement out of any part of the estate still undistributed or by a just and equitable contribution by the persons whose interest in the estate of the dece- dent would have been reduced if the tax had been paid before the distribution of the estate or whose interest is subject to equal or prior liability for the payment of taxes, debts, or other charges against the estate, it being the purpose and intent of this subchapter that so far as is practicable and unless otherwise directed by the will of the decedent the tax shall be paid out of the estate before its distribution. (c) LIABILITY OF LIFE INSURANCE BENEFICIARIES.- If any part of the gross estate consists of proceeds of policies of insurance upon the life of the decedent receivable by a beneficiary other than the execu- tor, the executor shall be entitled to recover from such beneficiary such portion of the total tax paid as the proceeds, in excess of $40,000, of such policies bear to the net estate. If there is more than one such beneficiary the executor shall be entitled to recover from such beneficiaries in the same ratio. SEC. 827. LIEN FOR TAX. (a) UPON GROSS ESTATE. -Unless the tax is sooner paid in full, it shall be a lien for ten years upon the gross estate of the decedent, except that such part of the gross estate as is used for the payment of charges against the estate and expenses of its administration, allowed by any court having jurisdiction thereof, shall be divested of such lien. If the Commissioner is satisfied that the tax liability of an estate has been fully discharged or provided for, he may, under regulations prescribed by him with the approval of the Secretary, issue his certificate, releasing any or all property of such estate from the lien herein imposed. (b) UPON PROPERTY OF TRANSFEREE.- If (1) except in the case of a bona fide sale for an adequate and full consideration in money or money's worth, the decedent makes a transfer, by trust or other- wise, of any property in contemplation of or intended to take effect in possession or enjoyment at or after his death, or makes a transfer, by trust or otherwise, under which he has retained for his life or for any period not ascertainable without reference to his death or for any period which does not in fact end before his death (A) the pos- session or enjoyment of, or the right to the income from, the prop- erty, or (B) the right, either alone or in conjunction with any person, to designate the persons who shall possess or enjoy the property or the income therefrom, or (2) if insurance passes under a contract executed by the decedent in favor of a specific beneficiary, and if in either case the tax in respect thereto is not paid when due, then the transferee, trustee, or beneficiary shall be personally liable for such tax, and such property, to the extent of the decedent s inter- est therein at the time of such transfer, or to the extent of such bene- ficiary's interest under such contract of insurance, shall be subject to a like lien equal to the amount of such tax. Any part of such prop- erty sold by such transferee or trustee to a bona fide purchaser for an adequate and full consideration in money or money s worth shall be divested of the lien and a like lien shall then attach to all the property of such transferee or trustee, except any part sold to a bona fide purchaser for an adequate and full consideration in money or money's worth. (c) CONTINUANCE AFTER DISCHARGE OF ExECUTOR. - The provisions of section 825 shall not operate as a release of any part of the gross estate from the lien for any deficiency that may thereafter be deter- mined to be due, unless the title to such part of the gross estate has passed to a bona fide purchaser for value, in which case such part 128
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