Kite: IRS Wins QTIP Battle But Loses Annuity War
Kerry A. Ryan
Saint Louis University School of Law
December 9, 2013
Tax Notes, Vol. 141, No. 10, 2013
Saint Louis U. Legal Studies Research Paper No. 2013--31
In Kite, the Tax Court held that a 10-year deferred annuity constituted adequate and full consideration for a transfer of family partnership interests, even though the transferor died before receiving any payments. The court also held that the liquidation of a qualified terminable interest property trust and subsequent sale of its assets constituted a disposition of the qualifying income interest for life, resulting in a deemed transfer of the entire trust under section 2519. Ryan discusses those holdings and two more issues that were not raised in the Tax Court proceeding but are clearly implicated by the Kite facts.
Number of Pages in PDF File: 7
Keywords: estate tax, gift tax, annuity, deferred annuity, QTIP, Kite, marital deduction, 1014, income tax, basis
JEL Classification: H2,K34
Date posted: December 12, 2013 ; Last revised: May 30, 2014
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