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create such a qualified interest, the trust instrument must
prohibit both (1) distributions from the trust to or for the
benefit of any person other than the annuitant during the term of
the interest and (2) commutation (prepayment) of the annuity
interest. See sec. 25.2702-3(d)(2), (4), Gift Tax Regs.
Similarly, the present value of the annuity portion of a
charitable remainder annuity trust is computed under section
20.2031-7(d), Estate Tax Regs., notwithstanding that the trust
may not be altered to provide for payment to or for the benefit
of any noncharitable beneficiary other than the person or persons
named in the governing instrument. See sec. 1.664-2(a)(1)(i),
(a)(4), (c), Income Tax Regs. Hence, we find statutory and
regulatory support for the premise that lack of liquidity or
marketability is not taken into account in determining whether
tabular valuation is appropriate.
Given the foregoing precedent, we are convinced that there
exists no authority for the anomalous position taken by the U.S.
District Court for the Eastern District of California in Estate
of Shackleford v. United States, 84 AFTR 2d 99-5902, 99-2 USTC
par. 60,356 (E.D. Cal. 1999). Estate of Shackleford v. United
States, supra, involved facts nearly identical to those now
before this Court. Mr. Shackleford won a California lottery
prize to be paid in 20 nonassignable annual installments and then
died after receiving only three payments. See id. at 99-5902 to
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