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remainder interest from the trust considering the annuity payment
to Birchfield based on her normal life expectancy. Petitioner
now asserts that this calculation had been done incorrectly and
that a shorter life expectancy should have been used resulting in
a greater charitable deduction for the remainder interest.
Respondent determined that the charitable remainder annuity
trust was not a valid CRAT and that no charitable deduction was
available to the estate. Respondent also determined that several
of the estate expenses were improperly deducted because they had
not been paid. Though respondent agrees that several of the
deductions are now allowable, respondent continues to maintain
that the charitable deduction taken by the estate should be
disallowed. Respondent determined that the trust did not
continue to function as a charitable remainder annuity trust for
two reasons: First, when it failed to pay the required annual
amount to decedent during her life and, second, when the trust
ostensibly agreed to pay money towards the tax liability on the
funds distributed to Mary Birchfield in accordance with the
settlement. Petitioner maintains that the estate qualifies for a
charitable deduction under section 2055 and that it is entitled
to a refund because a greater charitable deduction should have
1(...continued)
death, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
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Last modified: May 25, 2011