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stream without taking into account the nature of the underlying
corpus or asset giving rise to the right to payments. According
to the estate:
An annuity is generally defined as a right to receive
fixed, periodic payments, either for life or a term of
years, but an annuity exists only by virtue of a corpus
invested to produce an income stream for a specified
term pursuant to a contract or other agreement.
Contrary to the suggestion made by the Commissioner
that the Stipulation of Facts regarding the source and
reason for the payments is immaterial, any
determination of the nature of this asset requires an
analysis of the underlying characteristics and factors
that create the right to those payments. * * *
The estate proceeds to offer a litany of features which
would characterize what, in the estate’s estimation, would
customarily be understood as an annuity. As described by the
estate, an annuity is purchased for a premium substantially
greater than $1. The annual installments are then derived from
this corpus invested by or for the recipient, such that an
annuity contract provides for the liquidation of an asset. The
amount of the installments, in turn, is a function not only of
the invested contribution but also typically of the annuitant’s
age, gender, health, and the type of annuity contract purchased.
With respect to contract type, options available to the
purchaser, each with a consequent impact on benefit level,
include an immediate or a deferred benefit, a single or an annual
premium, a fixed or a variable payment, and a termination of
benefits on death or a guaranteed minimum number of installments.
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