PUBLIC LAWS-CH. 720-OCT. 25 , 1949
47 Stat. 245.
26U.S.C.§1000
note.
Ante, p. 893.
53 Stat. 121 .
26 U.S. C . §811 (d);
Supp. II, § 811 (d).
53 Stat. 121.
26U.S.C. 811(C).
this chapter. In the event of such relinquishment, the reciprocal
transfer made by the person relinquishing such power shall be deemed,
for the purposes of this chapter, to have been a completed gift at the
time such reciprocal transfer was made. This subsection shall apply
only if, at the time such person made the aforesaid reciprocal transfer
of property, a law was in effect imposing a tax upon the transfer of
property by gift and a gift tax was paid with respect to such reciprocal
transfer, and not credited or refunded."
(b) Section 501 of the Revenue Act of 1932 (imposing a gift tax)
is hereby amended by adding at the end thereof the following new
subsection:
"(d) CERTAIN RECIPROCAL TRUSTS. - In the case of property trans-
ferred in trust prior to January 1, 1940, if and to the extent that such
property may be deemed to have been so transferred by a person other
than the nominal grantor of such property (by reason of the fact that
such person has made a reciprocal transfer of property in trust), then
a relinquishment by such person of any power over such property or
over the income therefrom shall not be deemed a transfer of property
for the purposes of this title. In the event of such relinquishment on
or before December 31, 1950, the reciprocal transfer made by the person
relinquishing such power shall be deemed, for the purposes of this title,
to have been a completed gift at the time such reciprocal transfer was
made. This subsection shall apply only if, at the time such person
made the aforesaid reciprocal transfer of property, a law was in effect
imposing a tax upon the transfer of property by gift and a gift tax
was paid with respect to such reciprocal transfer, and not credited or
refunded."
(c) In the case of a decedent who relinquished on or before Decem-
ber 31, 1950, a power described in section 1000 (g) of the Internal
Revenue Code, such relinquishment shall, for the purposes of section
811 (d) of such code, be deemed not to have been made in contempla-
tion of the death of such decedent if such relinquishment, by virtue
of the enactment of this section, is not deemed a transfer of property
for the purposes of the gift tax. The provisions of this subsection
shall be applicable with respect to estates of decedents dying after
February 10, 1939.
SEC. 7. TRANSFERS TAKING EFFECT AT DEATH.
(a) Section 811 (c) of the Internal Revenue Code (relating to trans-
fers in contemplation of or taking effect at death) is hereby amended
to read as follows:
"(c) TRANSFERS IN CONTEMPLATION OF, OR TAKING EFFECT AT,
DEATr.-
"(1) GENERAL RULE. -To the extent of any interest therein of
which the decedent has at any time made a transfer (except in
case of a bona fide sale for an adequate and full consideration in
money or money's worth), by trust or otherwise-
"(A) in contemplation of his death. Any transfer of a
material part of his property in the nature of a final disposi-
tion or distribution thereof, made by the decedent within two
years prior to his death without such consideration, shall,
unless shown to the contrary, be deemed to have been made
in contemplation of death within the meaning of this sub-
chapter; or
"(B) 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 (i) the
possession or enjoyment of, or the right to the income from,
894
[63 STAT.
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