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Discussion
Section 25.2512-5, Gift Tax Regs., provides actuarial tables
to be used in computing the present value of an annuity, life
estate, remainder, or reversion transferred after November 30,
1983, and before May 1, 1989.
The actuarial tables referred to above are
provided as an administrative necessity and their
general use has been approved by the courts. Simpson
v. United States, 252 U.S. 547, 550-551 (1920); Estate
of Fabric v. Commissioner, 83 T.C. 932, 941 (1984).
The actuarial tables regularly are applied in valuing
contingent property interests given that they "afford a
reasonable norm and some degree of certainty in
ascertaining the value of property and the consequent
tax liabilities of the beneficiaries thereof." Miami
Beach First Natl. Bank v. United States, 443 F.2d 116,
119 (5th Cir. 1971).
Nonetheless, the courts have long recognized that
the actuarial tables should not be applied in those
"exceptional cases" where the result would be
unreasonable. Id. at 120; Estate of Lion v.
Commissioner, 438 F.2d 56, 61 (4th Cir. 1971), affg. 52
T.C. 601 (1969); Weller v. Commissioner, 38 T.C. 790,
803 (1962). The party seeking to eschew the actuarial
tables bears the burden of proving that the
circumstances justify a departure from the norm. Bank
of California v. United States, 672 F.2d 758, 759-760
(9th Cir. 1982); Continental Ill. Natl. Bank & Trust
Co. v. United States, 504 F.2d 586, 594 (7th Cir.
1974); Weller v. Commissioner, supra. [Estate of
McLendon v. Commissioner, 66 TCM (CCH) at 964, 64 TCM
(RIA) at 2456.]
As our survey of the case law in our earlier Memorandum Opinion
reveals, there has been a substantial amount of litigation
involving the question of the circumstances that would justify a
departure from the actuarial tables.
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