-4-
annuity term and the percentage used to calculate the amount of
the first annuity payment.
On April 14, 1997 and 1998, decedent filed a Form 709,
United States Gift (and Generation-Skipping Transfer) Tax Return,
for 1996 and 1997, respectively, reporting that his October 25,
1996, transfer was a gift for Federal gift tax purposes. On the
1996 return, decedent calculated the value of that gift by
reducing the value of his transferred shares by the actuarially
determined value of a 2-life annuity under section 7520; i.e.,
the present value of the annuity payable until the earlier of (1)
the end of the applicable 2- or 4-year term or (2) the deaths of
both decedent and Focardi. On the 1997 return, decedent reported
gifts for prior periods inclusive of the taxable gifts reported
on his Form 709 for 1996.
Respondent determined that decedent’s gift tax for 1996 must
be calculated by reducing the value of decedent’s transferred
shares by the value of a single-life annuity; i.e., the present
value of the annuity payable until the earlier of (1) the end of
the applicable 2- or 4-year period or (2) the death of decedent.
Respondent also determined a gift tax deficiency for 1997 due to
the increase in prior year gifts as a result of his determination
for 1996.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011