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published opinion 786 F.2d 1174 (9th Cir. 1986); see also Carson
v. Commissioner, 641 F.2d 864, 866 (10th Cir. 1981), affg. 71
T.C. 252 (1978). As we further noted in Harwood v. Commissioner,
supra at 258: "Transactions within a family group are subject to
special scrutiny, and the presumption is that a transfer between
family members is a gift."
Section 7520 generally requires (with certain exceptions not
applicable here) the value of any annuity, interest for life or
term of years, remainder, or reversionary interest to be
determined under tables or formulas prescribed by the Secretary
in regulations thereunder. Each such valuation under section
7520 is to consist of (1) an interest rate component (rounded to
the nearest .2 percent) equal to 120 percent of the Federal
midterm rate in effect under section 1274(d)(1) for the month in
which the valuation date falls and (2) a mortality component,
reflecting the most recent mortality data from the U.S. census
(updated every 10 years). Sec. 7520(a)(1) and (2), (c)(1), (3);
sec. 20.7520-1(c), (b)(1)(i), (2), Estate Tax Regs.; sec.
25.7520-1(c), (b)(1)(i), (2), Gift Tax Regs.
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