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Section 75204 (which was enacted on November 10, 1988, as
part of the Technical and Miscellaneous Revenue Act of 1988
(TAMRA), Pub. L. 100-647, sec. 5031(a), 102 Stat. 3342, 3368) is
effective for transactions with valuation dates after April 30,
1989. TAMRA sec. 5031(c), 102 Stat. 3369. Generally, the
valuation date for gift tax purposes is the date upon which the
gift is made. Sec. 25.7520-1(b)(1)(ii), Gift Tax Regs.
In the instant case, petitioner contends that the private
annuity payable to decedent is not to be valued under section
7520, because the private annuity transaction occurred before the
May 1, 1989, effective date of section 7520. Petitioner
maintains that the transaction took place in late 1988, when the
4 Before the enactment of sec. 7520, the estate and gift
tax regulations long had contained actuarial tables to assist in
the computation of the fair market value of annuities, life
estates, terms for years, remainders, and reversions. Although
use of these tables was not statutorily mandated, they were
provided as an administrative necessity, and their general use
was 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). As a result, these administrative actuarial
tables were regularly 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 beneficiaries thereof." Miami
Beach First Natl. Bank v. United States, 443 F.2d 116, 119 (5th
Cir. 1971). Indeed, as the U.S. Court of Appeals for the Ninth
Circuit noted in Estate of Christ v. Commissioner, 480 F.2d 171,
172-173 (9th Cir. 1973) (quoting Hanley v. United States, 105 Ct.
Cl. 638, 63 F. Supp. 73, 80 (1945)), affg. 54 T.C. 493 (1970),
the Commissioner's administrative tables were to be used unless
their use would produce "'a result substantially at variance with
the facts.'"
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