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checks, nor did petitioner present any evidence demonstrating a
gap in the check sequence. Though MacQuarrie testified that he
made copies of checks written on the trust account, no such
copies were presented to evidence these alleged payments. On the
other hand, we do have evidence that no payments were ever
actually consummated before decedent’s death. The trust was
never diminished by any payments during decedent’s life. Because
the trust value was undiminished and no transfer of funds
occurred, operationally the trust did not meet the express 5-
percent requirement of the statute and cannot qualify for
treatment as a charitable remainder trust. Accordingly, section
2055 applies, and the estate is not entitled to a deduction for
the bequest of a charitable split-interest.4
Petitioner alternatively argues that the trust should not be
disqualified as a CRAT for the lack of payments to decedent
because the failure of action took place during the trustor’s
lifetime. Petitioner argues that section 1.664-1(a)(5), Income
Tax Regs., allows for CRAT’s created inter vivos to ignore all of
the requirements established by section 664 until the moment of
4 The additional failure of the trust attributable to the
payments to the secondary beneficiary, when coupled with the more
technical “5 percent rule” makes respondent’s position that the
trust failed operationally more compelling. See infra pp. 14-15.
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