-20-
remainder interest, and would allow a deduction for (a transfer
of) the value of the annuity interest that the Trust would pay to
the Foundation. But the problem for the estate is that this
section of the regulations applies only to interests passing from
the decedent directly. See sec. 20.2055-2(e)(1), Estate Tax
Regs. When the interest is created by operation of a
disclaimer,13 as it was in this case, section 20.2055-2(c)(1) of
the estate tax regulations tells us to look to the disclaimer
rules: “The amount of a * * * transfer for which a deduction is
allowable under section 2055 includes an interest which falls
into the bequest, devise or transfer as the result of * * * (i) A
qualified disclaimer (see section 2518 and the corresponding
regulations for rules relating to a qualified disclaimer).”
Because Hamilton’s disclaimer is not, under that regulation, a
qualified disclaimer as to any portion of the property passing to
the Trust, none of the property transferred to the Trust
generates a charitable deduction.
13 The dissent relies on examples 8 and 11 in section
25.2518-(3)(d), Gift Tax Regs., see infra pp. 47-48, as showing
that a disclaimant may make a qualified disclaimer of income
only, or of corpus only, and keep the rest. This is true--but
only if the decedent herself carved out income or corpus
interests in her will, not if the disclaimant is trying to do so
through the disclaimer. As the regulation carefully notes, “in
general, each interest in property that is separately created by
the transferor is treated as a separate interest.” Sec. 25.2518-
3(a)(1), Gift Tax Regs. (emphasis added). In this case, Hamilton
was bequeathed all her mother’s property in fee simple and was,
through the disclaimer, trying to carve it up in tax-advantaged
ways by herself.
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