- 12 - interests in the 2-year term annuities set forth in the trust documents. Such interests thus were, as required by the regulations, “held by the same individual both before and after the transfer in trust.” Sec. 25.2702-2(a)(3), Gift Tax Regs. B. The Extent of the Qualified Interest Having therefore decided that petitioner, either individually or through her estate, retained the 2-year annuities in their entirety, we next consider the extent to which these interests are “qualified”. In this connection, section 2702 itself provides only that “qualified interest” means “any interest which consists of the right to receive fixed amounts payable not less frequently than annually”. Sec. 2702(b)(1). Since a simple 2-year annuity would appear to fall within this definition, we turn to whether relevant regulations set forth additional restrictions. The regulatory provision which enumerates the permissible terms for a qualified annuity mandates that the term be “for the life of the term holder, for a specified term of years, or for the shorter (but not the longer) of those periods.” Sec. 25.2702-3(d)(3), Gift Tax Regs. Petitioner thus contends that her 2-year annuities are sanctioned by the second of these three options and may be valued as such. Respondent, however, asserts that petitioner’s annuities are in fact of the third listed typePage: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
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