Estate of Melvine B. Atkinson - Page 1

                                   115 T.C. No. 3                                     

                               UNITED STATES TAX COURT                                

                         MACQUARRIE, EXECUTOR, Petitioner v.                          
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 20968-97.                    Filed July 26, 2000.           

                    R determined that the estate was not entitled to                  
               deduct the charitable remainder interest in a trust                    
               that was intended to be a charitable remainder annuity                 
               trust (CRAT).  R challenged the validity of the CRAT on                
               two bases:  First, that the annual 5-percent minimum                   
               distributions were not made as required by sec.                        
               664(d)(1)(A), I.R.C., and second, that sec.                            
               664(d)(1)(B), I.R.C., will be violated because the                     
               trust corpus would have to be invaded to satisfy the                   
               estate’s obligation to pay one of the noncharitable                    
               secondary beneficiary’s apportioned part of the estate                 
                    Held:  No charitable deduction is allowable                       
               because:  (1) Sec. 664(d), I.R.C., requires that                       
               minimum payments be distributed annually from the                      
               inception of the CRAT to certain designated persons,                   
               and these payments were not made, and (2) no portion of                
               a purported CRAT may be paid to anyone other than                      
               designated noncharitable beneficiaries or statutorily                  

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