- 17 - stream without taking into account the nature of the underlying corpus or asset giving rise to the right to payments. According to the estate: An annuity is generally defined as a right to receive fixed, periodic payments, either for life or a term of years, but an annuity exists only by virtue of a corpus invested to produce an income stream for a specified term pursuant to a contract or other agreement. Contrary to the suggestion made by the Commissioner that the Stipulation of Facts regarding the source and reason for the payments is immaterial, any determination of the nature of this asset requires an analysis of the underlying characteristics and factors that create the right to those payments. * * * The estate proceeds to offer a litany of features which would characterize what, in the estate’s estimation, would customarily be understood as an annuity. As described by the estate, an annuity is purchased for a premium substantially greater than $1. The annual installments are then derived from this corpus invested by or for the recipient, such that an annuity contract provides for the liquidation of an asset. The amount of the installments, in turn, is a function not only of the invested contribution but also typically of the annuitant’s age, gender, health, and the type of annuity contract purchased. With respect to contract type, options available to the purchaser, each with a consequent impact on benefit level, include an immediate or a deferred benefit, a single or an annual premium, a fixed or a variable payment, and a termination of benefits on death or a guaranteed minimum number of installments.Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
Last modified: May 25, 2011