- 33 -
B. Analysis
In the present matter, respondent determined the value of
the annuities includable in the gross estate utilizing the tables
and interest rates prescribed under section 7520 and set forth in
section 20.2031-7(d), Estate Tax Regs. Those computations have
not been made a part of the record, and the estate has never
disputed that the calculations reflect a correct application of
the section 7520 actuarial methodology and attendant tables.
Rather, the estate advocates use of section 20.2031-8, Estate Tax
Regs., contending for valuation “on the basis of the cost of
commercial replacement annuities as of decedent’s date of death”.
The estate’s argument on this point is limited to a few
sentences, the substance of which is contained in the following:
“Petitioner takes the position that commercial annuities were
purchased in connection with the settlement arrangement.
Therefore, the proper method for valuation of such annuities
would be comparable commercial contracts as of the Decedent’s
date of death, the method of valuation specified under Treas.
Reg. 20:2031-8.”
There exist, however several difficulties with the estate’s
position. First, as previously noted, the legally determinative
document conferring on decedent the right to streams of periodic
payments is the settlement agreement. That right is to periodic
payments from the hospital, not from a commercial annuity
Page: Previous 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 NextLast modified: May 25, 2011