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limitation unless the language or necessary implication
of the section involved makes its application dependent
on state law. [United States v. Pelzer, 312 U.S. 399,
402-403 (1941) (refusing to apply Alabama law to
determine whether an interest was a future interest for
purposes of section 504(b), the predecessor to section
2035(b))].
Thus, we do not need to apply Virginia law to ascertain what
precise future interest was held by the grandchildren. The
annual per donee exclusion is not available for future interests.
Sec. 2503(b). A future interest is any interest or estate,
vested or contingent, limited to commence in possession or
enjoyment at a future date. United States v. Pelzer, supra.
Accordingly, no annual exclusions are available for the future
interests in the grandchildren.
We conclude, for these reasons, that the lifetime gift made
by decedent in 1986, with a value of $51,372.50 ($71,372.50 less
$20,000 for exclusions pursuant to section 2503(b)), shall be
treated as an adjusted taxable gift for purposes of section
2001(b).
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011