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probability that an individual with a known incurable illness
will die within 1 year, and (2) deaths resulting from a common
accident. See sec. 20.7520-3(b)(3)(i), (iii), Estate Tax Regs.
Although this regulatory text is not applicable here, the
preamble to T.D. 8630, 1996-1 C.B. 339, which adopted paragraph
(b) as an amendment to the final regulations under section 7520,
addressed the relationship of the new provisions to prior law as
follows:
One commentator suggested that the tables
prescribed by the regulations must be used for valuing
all interests transferred between April 30, 1989 (the
effective date of section 7520) and December 13, 1995
(the effective date of the regulations). However,
these regulations generally adopt principles
established in case law and published IRS positions.
* * * There is no indication that Congress intended to
supersede this well-established case law and
administrative ruling position when it enacted section
7520. Consequently, in the case of transfers prior to
the effective date of these regulations, the question
of whether a particular interest must be valued based
on the tables will be resolved based on applicable case
law and revenue rulings.
In addition, the regulations contain a transitional rule
which reads: “If the valuation date is after April 30, 1989, and
before June 10, 1994, an executor can rely on Notice 89-24, 1989-
1 C.B. 660, or Notice 89-60, 1989-1 C.B. 700 * * *, in valuing
the transferred interest.” Sec. 20.7520-4(a), Estate Tax Regs.
The referenced Notices set forth formulas and tables of actuarial
factors intended “to provide guidance to taxpayers in determining
the present value of * * * an interest for life * * * under
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Last modified: May 25, 2011