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The second sentence of section 25.2518-2(e)(3), Gift Tax Regs.,
provides as follows:
(3) Partial failure of disclaimer.
* * * * * * *
If the portion of the disclaimed interest in property
which the disclaimant has a right to receive is not
severable property or an undivided portion of the
property, then the disclaimer is not a qualified
disclaimer with respect to any portion of the property.
* * * [Emphasis added.]
Thus, all of the $2,421,671 passing to the trust (i.e., not
only the $434,156 reflecting the agreed 18-percent value of the
retained contingent remainder but also the $1,987,515 reflecting
the agreed 82-percent value of the annuity) is to be treated as
disqualifed only if the disqualified contingent remainder is not
severable from the annuity.
With regard to severability, section 25.2518-3(a)(1)(ii),
Gift Tax Regs., provides that to be treated as severable property
the separate interests must maintain “a complete and independent
existence.” I see no reason the fixed annuity and the remainder
before us could not and would not be treated as independent of
each other.
The severable nature of a fixed dollar, fixed term annuity
such as that involved herein and a remainder are well established
by the Commissioner’s own regulations and ruling position. See
section 20.2055-2(a), Estate Tax Regs., and section 25.2522(c)-
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Last modified: March 27, 2008