- 13 - payment of the real estate taxes on decedent's Sandwich, Massachusetts, residence is not expressed as a specified dollar amount (or calculable as such) or as a fixed percentage of fair market value; thus, the payment for taxes is not fixed as required under section 2055(e)(3)(C)(ii). More significantly, the provision for payment to Melissa and Erica Rodgerson of the balance of the trust's "net income" (after satisfaction of the payments directed for other noncharitable beneficiaries) is neither a specified dollar amount nor a fixed percentage of fair market value. Indeed, by providing for a payout of net income to a noncharitable beneficiary, the trust's terms would enable the specific abuse to which the 1969 Act rules (i.e., the provisions of section 2055(e)(2)) were addressed; namely, the reduction of the value of the remainder interest actually passing to charity below the amount of the deduction claimed, because of the 11(...continued) 2055(e)(3)(C)(i); i.e., the remainder interest would not be an allowable deduction under pre-1969-Act law because the payments are not "ascertainable". We note that the trust instrument provides, immediately after directing the foregoing payments, that "the balance of the trust net income" is to be paid to two other beneficiaries. This juxtaposition gives rise to a possible interpretation that the payments to Wanda Rodgerson and Migle Francaite are limited to the trust's net income, and the estate makes an argument on similar grounds that the remainder interest was ascertainable. However, we find it unnecessary to decide whether the remainder interest satisfies sec. 2055(e)(3)(C)(i), as the remainder interest's failure to satisfy sec. 2055(e)(3)(C)(ii) precludes a finding that it is a "reformable interest" in any event.Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
Last modified: May 25, 2011