Audrey J. Walton - Page 19

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          contingent reversion in the trust corpus to take effect in the              
          event of his or her death during the term.  The value of the gift           
          to the remaindermen would then be calculated by subtracting                 
          actuarial amounts for each of these interests, despite the                  
          negligible chance that the reversion would become operative.                
               Respondent then goes on to frame the annuities payable to              
          petitioner’s estate as no different in substance from such                  
          reversions.  Respondent’s position is that both represent                   
          separate rights to receive property contingent upon the grantor’s           
          death during the trust term.  Because contingent rights, not                
          fixed or ascertainable at the creation of the trust, do not fall            
          within any of the three forms defined as qualified in section               
          2702(b), respondent maintains that both are properly valued at              
          zero.  On this basis, respondent argues that Example 5 is                   
          consistent not only with the purpose of section 2702 but also               
          with other regulations which deal with post-death interests,                
          particularly section 25.2702-3(e), Example (1), Gift Tax Regs.              
               Respondent further contends that Congress’ reference to a              
          trust consisting only of a fixed-term annuity and a noncontingent           
          remainder was describing a situation different from that of                 
          petitioner here.  Respondent avers that the scenario contemplated           
          by the lawmakers was one in which the donor transferred the lead            
          annuity to an entity with perpetual life and retained a                     
          noncontingent remainder.  According to respondent, only in that             

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