Estate of Sarah M. Davenport, Deceased, Richard Davenport, Executor - Page 32

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          the application of that section.  Sec. 20.7520-3, Estate Tax                
          Regs.  The estate has raised none of these exceptions, and they             
          will not be further addressed.                                              
               Section 20.2031-7, Estate Tax Regs., entitled “Valuation of            
          annuities, interests for life or term of years, and remainder or            
          reversionary interests”, reads in part:                                     
                    (a) In general.--Except as otherwise provided in                  
               paragraph (b) of this section and sec. 20.7520-3(b)                    
               (pertaining to certain limitations on the use of                       
               prescribed tables), the fair market value of annuities,                
               life estates, terms of years, remainders, and                          
               reversionary interests for estates of decedents is the                 
               present value of such interests, determined under                      
               paragraph (d) of this section.  The regulations in this                
               and in related sections provide tables with standard                   
               actuarial factors and examples that illustrate how to                  
               use the tables to compute the present value of ordinary                
               annuity, life, and remainder interests in property.                    
               These sections also refer to standard and special                      
               actuarial factors that may be necessary to compute the                 
               present value of similar interests in more unusual fact                
               situations.                                                            
                    (b) Commercial annuities and insurance                            
               contracts.--The value of annuities issued by companies                 
               regularly engaged in their sale, and of insurance                      
               policies on the lives of persons other than the                        
               decedent, is determined under sec. 20.2031-8. * * *                    
          The referenced section 20.2031-8, Estate Tax Regs., then states,            
          as relevant here:  “The value of a contract for the payment of an           
          annuity, or an insurance policy on the life of a person other               
          than the decedent, issued by a company regularly engaged in the             
          selling of contracts of that character is established through the           
          sale by that company of comparable contracts.”  Sec. 20.2031-               
          8(a)(1), Estate Tax Regs.                                                   





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