(1) Life estates, remainders, and similar interests. The values of life estates, remainders, and similar interests are to be obtained by applying the methods prescribed in § 20.2031-7, using (i) the age of each person, the duration of whose life may affect the value of the interest, as of the date of the decedent's death, and (ii) the value of the property as of the alternate valuation date. For example, assume that the decedent, or the decedent's estate, was entitled to receive certain property worth $50,000 upon the death of A, who was entitled to the income for life. At the time of the decedent's death, on or after May 1, 2009, A was 47 years and 5 months old. In the month in which the decedent died, the section 7520 rate was 6.2 percent. The value of the decedent's remainder interest at the date of the decedent's death would, as illustrated in Example 1 of § 20.2031-7T(d)(5), be $9,336.00 ($50,000 × .18672). If, because of economic conditions, the property declined in value and was worth only $40,000 on the date that was 6 months after the date of the decedent's death, the value of the remainder interest would be $7,468.80 ($40,000 × .18672), even though A would be 48 years old on the alternate valuation date.
(f) (2) through (g) [Reserved] For further guidance, see § 20.2032-1(f)(2) through (g).
(h) Effective/applicability date. Paragraph (f)(1) applies on or after May 1, 2009.
(i) Expiration date. Paragraph (f)(1) expires on or before May 1, 2012.
[T.D. 9448, 74 FR 21509, May 7, 2009]
Title 26 published on 2012-04-01
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