Prop. Regs. address application of Secs. 2036 and 2039 to certain annuities.

Tax Adviser, The, September, 2007 by Nevius, Alistair J.D.

Sec. 2036 provides for the inclusion in a decedent's estate of certain transfers the decedent made during his or her lifetime in which the decedent retained certain rights in the property. Sec. 2039 provides for the inclusion in a decedent's estate of the value of any annuity receivable by a beneficiary by reason of surviving the decedent if such annuity was payable to the decedent. These provisions may overlap in the case of certain tax planning techniques a decedent executed during his or her lifetime that were still in place at the time of the decedent's death. The determination of value for estate tax purposes can vary significantly depending on whether a decedent's estate applies Sec. 2036 or Sec. 2039 in these cases. The IRS has issued proposed regulations under...

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