PUBLIC LAW 94-455—OCT. 4, 1976
9 0 STAT. 1855
" (A) $100,000 reduced (but not below zero) by the aggregate of the deductions allowed under this section for preceding calendar quarters beginning after December 31, 1976; plus " (B) 50 percent of the lesser of— " (i) the amount of the deductions allowable under paragraph (1) for such calendar quarter (determined without regard to this paragraph); or " ( i i) the amount (if any) by which the aggregate of the amounts determined under clause (i) for the calendar quarter and for each preceding calendar quarter beginning after December 31, 1976, exceeds $200,000." (c) FRACTIONAL INTEREST OF S P O U S E. —
(1) IN GENERAL.—Section 2040 (relating to joint interests) is 26 USC 2040. amended by adding a t the end thereof the following new subsection: "(b)
CERTAIN JOINT INTERESTS OF HUSBAND AND W I F E. — " (1) INTERESTS OF SPOUSE EXCLUDED FROM GROSS ESTATE.—Not-
withstanding subsection (a), in the case of any qualified joint interest, the value included in the gross estate with respect to such interest by reason of this section is one-half of the value of such qualified joint interest. "(2)
QUALIFIED JOINT INTEREST DEFINED.—For
purposes
of
paragraph (1), the term 'qualified joint interest' means any interest in property held by the decedent and the decedent's spouse as joint tenants or as tenants by the entirety, but only if— " (A) such joint interest was created by the decedent, the decedent's spouse, or both, " (B)(i) in the case of personal property, the creation of such joint interest constituted in whole or m part a gift for purposes of chapter 12, or " ( i i) i n the case of real property, an election under section 2515 applies with respect to the creation of such joint interest, and " (C) in the case of a joint tenancy, only the decedent and the decedent's spouse are joint tenants." (2) AMENDMENT OF RELATED GIFT TAX PROVISION.—Subsection
(c) of section 2515 (relating to election with respect to tenancies 26 USC 2515. by the entirety) is amended to read as follows: "(c)
EXERCISE o r ELECTION. —
" (1) IN GENERAL.—The election provided by subsection (a) shall be exercised by including such creation of a tenancy by the entirety as a transfer by gift, to the extent such transfer constitutes a gift (determined without regard to this section), in the gift tax return of the donor for the calendar quarter in which such tenancy by the entirety was created, filed within the time prescribed by law, irrespective of whether or not the gift exceeds the exclusion provided by section 2503(b). " (2) SUBSEQUENT ADDITIONS I N VALUE.—If the election provided
by subsection (a) has been made with respect to the creation of any tenancy by the entirety, such election shall also apply to each addition made to the value of such tenancy by the entirety. " (3) CERTAIN ACTUARIAL COMPUTATIONS NOT REQUIRED.—In the
case of any election under subsection (a) with respect to any property, the retained interest of each spouse shall be treated as one-half of the value of their joint interest."
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