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Kite: IRS Wins QTIP Battle But Loses Annuity War

7 Pages Posted: 12 Dec 2013 Last revised: 30 May 2014

Kerry A. Ryan

Saint Louis University School of Law

Date Written: December 9, 2013

Abstract

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.

Keywords: estate tax, gift tax, annuity, deferred annuity, QTIP, Kite, marital deduction, 1014, income tax, basis

JEL Classification: H2,K34

Suggested Citation

Ryan, Kerry A., Kite: IRS Wins QTIP Battle But Loses Annuity War (December 9, 2013). Tax Notes, Vol. 141, No. 10, 2013; Saint Louis U. Legal Studies Research Paper No. 2013--31. Available at SSRN: https://ssrn.com/abstract=2365846

Kerry A. Ryan (Contact Author)

Saint Louis University School of Law ( email )

100 N. Tucker Blvd.
St. Louis, MO 63101
United States
3149777237 (Phone)
3149773332 (Fax)

HOME PAGE: http://law.slu.edu/

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