Audrey J. Walton - Page 1

                                   115 T.C. No. 41                                    

                               UNITED STATES TAX COURT                                

                           AUDREY J. WALTON, Petitioner v.                            
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 3824-99.                 Filed December 22, 2000.           

                    P established and funded with corporate stock two                 
               substantially identical grantor retained annuity trusts                
               (GRAT’s).  Each GRAT had a 2-year term during which P                  
               retained the right to receive an annuity.  In the event                
               that P died prior to expiration of the 2-year term, the                
               remaining scheduled annuity payments were to be made to                
               her estate.  The balance of the trust property would                   
               then be paid to the remainder beneficiaries.                           
                    Held:  For purposes of determining the value under                
               sec. 2702, I.R.C., of the gift effected upon creation                  
               of each GRAT, P’s retained qualified interest is to be                 
               valued as an annuity for a specified term of years,                    
               rather than as an annuity for the shorter of a term                    
               certain or the period ending upon P’s death.                           
                    Held, further, Sec. 25.2702-3(e), Example (5),                    
               Gift Tax Regs., is an invalid interpretation of sec.                   
               2702, I.R.C.                                                           

Page:   1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011