- 5 - valued as interests for the term of 15 years or for the lives of the grantor and spouse, whichever is shorter. Respondent asserts that the interests in the annuities that were given to each spouse are not qualified interests and that the retained interests are single-life annuities. Respondent contends that the retained interests in the annuities should be valued as interests for the term of 15 years or for the life of the grantor, whichever is shorter. Valuation of a retained interest as a dual-life annuity produces a greater retained value than valuation as a single-life annuity and, correspondingly, reduces the amount of the taxable gift of the remainder. Section 2501 imposes a tax for each calendar year on the transfer of property by gift. A gift of property is valued as of the date of the transfer. See sec. 2512(a). Generally, where property is transferred in trust but the donor retains an interest in such property, the value of the gift is the value of the property that is transferred, less the value of the donor’s retained interest. See sec. 25.2512-5A(e), Gift Tax Regs. However, if the gift in trust is to a family member (as defined in section 2704(c)(2)), the value of the gift is determined subject to the limitations of section 2702.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011