26 U.S.C. § 2036: Transfers with retained life estate

the possession or enjoyment of, or the right to the income from, the property, or 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. For purposes of subsection (a)(1), the retention of the right to vote (directly or indirectly) shares of stock of a controlled corporation shall be considered to be a retention of the enjoyment of transferred property. For purposes of paragraph (1), a corporation shall be treated as a controlled corporation if, at any time after the transfer of the property and during the 3-year period ending on the date of the decedent’s death, the decedent owned (with the application of section 318), or had the right (either alone or in conjunction with any person) to vote, stock possessing at least 20 percent of the total combined voting power of all classes of stock. For purposes of applying section 2035 with respect to paragraph (1), the relinquishment or cessation of voting rights shall be treated as a transfer of property made by the decedent. This section shall not apply to a transfer made before March 4, 1931 ; nor to a transfer made after March 3, 1931 , and before June 7, 1932 , unless the property transferred would have been includible in the decedent’s gross estate by reason of the amendatory language of the joint resolution of March 3, 1931 ( 46 Stat. 1516 ). Except as provided in this subsection, any amendment made by this section [enacting section 2207B of this title and amending this section and section 2501 of this title ] shall take effect as if included in the provisions of the Revenue Act of 1987 [ Pub. L. 100–203, title X ] to which such amendment relates. The amendments made by subsection (a) [amending this section and section 2501 of this title ] shall apply in cases where the transfer referred to in section 2036(c)(1)(B) of the 1986 Code is on or after June 21, 1988 . If an amount is included in the gross estate of a decedent under section 2036 of the 1986 Code other than solely by reason of section 2036(c) of the 1986 Code, the amendments made by subsection (f) [enacting section 2207B of this title ] shall apply to such amount only with respect to property transferred after the date of the enactment of this Act [ Nov. 10, 1988 ]. during such period, such actions are taken as are necessary to have such section 2036(c)(1) not apply to such transaction (and any such interest), or the original transferor and his spouse on January 1, 1990 (or, if earlier, the date of the original transferor’s death), does not hold any interest in the enterprise involved. any failure to exercise a right of conversion, [sic] failures to exercise other rights specified in regulations,