-18-
be disclaimed share by share, but not by a general severance of
the right to receive dividends from a right to vote the shares
from a right to exercise any preemptive rights. By this
definition, Hamilton could disclaim a particular number of
partnership units but not, as she did with those passing to the
Trust, disclaim their present enjoyment but keep a remainder
interest in all of them.11
“An undivided portion of the property” is likewise defined,
in section 25.2518-3(b), Gift Tax Regs.:
An undivided portion of a disclaimant’s
separate interest in property must consist of
a fraction or percentage of each and every
substantial interest or right owned by the
disclaimant in such property and must extend
over the entire term of the disclaimant’s
interest in such property and in other
property into which such property is
converted. A disclaimer of some specific
rights while retaining other rights with
respect to an interest in the property is not
a qualified disclaimer of an undivided
portion of the disclaimant’s interest in
property. Thus, for example, a disclaimer
11 “Severability” is a concept that shows up as well in two
sections of the regulations that govern transfers of remainder
interests for the purpose of calculating the amount of charitable
deductions for estate and gift taxes. These regulations, sec.
20.2055-2(a), Estate Tax Regs., and sec. 25.2522(c)-3, Gift Tax
Regs., both talk about a remainder interest in property as
severable if it is “ascertainable”, which in context means “has
an ascertainable value.” The definition of “severability” that
we have to apply is the one for “severable property,” not
“severable interest.” That definition, sec. 25.2518-3(a)(1)(ii),
Gift Tax Regs., looks to whether each piece of a property
“maintains a complete and independent existence” after
severance--not whether each piece is capable of being valued
separately.
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Last modified: March 27, 2008