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irrevocable beneficiaries, which also entitled them to a death
benefit if Austin died before the annuity date.
The annuity was payable only to Austin if he lived to the
annuity date. Edna was not named as an annuitant, beneficiary,
or owner on the annuity application. Because she did not possess
a right to payments for any period under the annuity, the value
of the annuity is not includable in her gross estate under
section 2039.
However, the fact that an amount is not includable in a
decedent’s gross estate under section 2039 does not preclude its
inclusion in the gross estate under some other section of the
estate tax laws. See Estate of Kleemeier v. Commissioner, 58
T.C. 241, 252 (1972) (citing section 20.2039-1(a), Estate Tax
Regs.). The 1995 annuity was purchased by KPLP and was included
as one of its assets when Edna died. Its value is therefore
includable in Edna’s gross estate under section 2036 to the same
extent the values of the other KPLP assets are includable. In
calculating KPLP’s total value, the value of the 1995 annuity,
agreed upon by the parties as $143,000 at Edna’s death, should be
included. The portions includable in Edna’s gross estate (the
38.26-percent interest she contributed and the 1-percent general
partnership interest owned by the living trust) shall then be
calculated from the total value.
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