- 11 -
as a gift whether or not consideration was
received for such transfer.
(b) Qualified Interest.--For purposes of this
section, the term “qualified interest” means--
(1) any interest which consists of the right
to receive fixed amounts payable not less
frequently than annually,
(2) any interest which consists of the right
to receive amounts which are payable not less
frequently than annually and are a fixed
percentage of the fair market value of the
property in the trust (determined annually), and
(3) any noncontingent remainder interest if
all of the other interests in the trust consist of
interests described in paragraph (1) or (2).
Beyond the definitions of “qualified interest” contained in
section 2702(b), regulations promulgated under section 2702
define, and expand, “qualified interest” in the following manner:
Qualified interest means a qualified annuity interest,
a qualified unitrust interest, or a qualified remainder
interest. Retention of a power to revoke a qualified
annuity interest (or unitrust interest) of the
transferor’s spouse is treated as the retention of a
qualified annuity interest (or unitrust interest).
[Sec. 25.2702-2(a)(5), Gift Tax Regs.; emphasis added.]
A “qualified annuity interest” is “an irrevocable right to
receive a fixed amount”, “payable to (or for the benefit of) the
holder of the annuity interest for each taxable year of the
term.” Sec. 25.2702-3(b)(1)(i), Gift Tax Regs. A fixed amount
is either a stated dollar amount or a fixed fraction or
percentage (not to exceed 120 percent of the fixed fraction or
percentage payable in the preceding year) of the initial fair
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011