graph may be illustrated by the following examples: Example (1). The donor, a male, assigns an annuity of $10,000 a year payable annually during his life immediately after an annual payment has been made. The age of the donor on the date of assignment is 40 years and 8 months. By reference to Table A(1), It is found that the figure in column 2 opposite 41 years is 12.9934. The value of the gift is, therefore, $129,934 ($10,000 multiplied by 12.9934). Example (2). The donor was entitled to receive an annuity of $10,000 a year payable annually at the end of annual periods throughout a term of 20 years; the donor, when 15 years have elapsed, makes a gift thereof to his son. By reference to Table B, it is found that the figure in column 2 opposite 5 years, the unexpired portion of the 20-year period, is 4.2124. The present value of the annuity is, therefore, $42,124, $10,000 multiplied by 4.2124). (2) Payable at the end of semiannual, quarterly, monthly, or weekly periods. If an annuity is payable at the end of semiannual, quarterly, monthly, or weekly periods during the life of an individual (as for example if the first payment is due 1 month after the date of the gift), the aggregate amount to be paid within a year is first multiplied by the figure in column 2 of Table A(1) or A(2), whichever is appropriate, opposite the number of years in column 1 nearest the age of the individual whose life measures the duration of the annuity. The product so obtained is then multiplied by whichever of the following factors is appropriate: 1.0148 for semiannual payments, 1.0222 for quarterly payments, 1.0272 for monthly payments, 1.0291 for weekly payments If the annuity is payable at the end of semiannual, quarterly, monthly, or weekly periods for a definite number of years the aggregate amount to be paid within a year is first multiplied by the figure in column 2 of Table B opposite the number of years in column 1 representing the duration of the annuity. The product so obtained is then multiplied by whichever of the above factors is appropriate. The application of this subparagraph may be illustrated by the following example: Example. The facts are the same as those contained in example (1) set forth in subparagraph (1) above, except that the annuity is payable semiannually. The aggregate annual amount, $10,000, is multiplied by the factor 12.9934, and the product multiplied by 1.0148. The value of the gift is, therefore, $131,857.02 ($10,000 × 12.9934×1.0148). (3) Payable at the beginning of annual, semiannual, quarterly, monthly, or weekly periods. (i) If the first payment of an annuity for the life of an individual is due at the beginning of the annual or other payment period rather than at the end (as for example if the first payment is to be made immediately after the date of the gift), the value of the annuity is the sum of (a) the first payment plus (b) the present value of a similar annuity, the first payment of which is not to be made until the end of the payment period, determined as provided in subparagraph (1) or (2) of this paragraph. The application of this subdivision may be illustrated by the following example: Example. The donee, a woman, is made the beneficiary for life of an annuity of $50 a month from the income of a trust, subject to the right reserved by the donor to cause the annuity to be paid for his own benefit or for the benefit of another. On the day a payment is due, the donor relinquishes his reserved power. The donee is then 50 years of age. The value of the gift is $50 plus the product of $50 × 12 × 12.5793 (see Table A(2)) X1.0272. That is, $50 plus $7,752.87, or $7,802.87. (ii) If the first payment of an annuity for a definite number of years is due at the beginning of the annual or other payment period, the applicable factor is the product of the factor shown in Table B multiplied by whichever of the following factors is appropriate: 1.0600 for annual payments, The application of this subdivision may be illustrated by the following example: Example. The donee is the beneficiary of an annuity of $50 a month, subject to a reserved right in the donor to cause the annuity or the cash value thereof to be paid for his own benefit or the benefit of another. On the day a payment is due, the donor relinquishes the power. There are 300 payments to be made covering a period of 25 years, including the payment due. The value of the gift is the product of $50 X 12 X 12.7834 (factor for 25 years Table B) X1.0322, or $7,917.02. (c) Life estates and terms for years. If the interest to be valued is the right of a person for his life, or for the life of another person, to receive the income of certain property or to use nonincomeproducing property, the value of the interest is the value of the property multiplied by the figure in column 3 of Table A(1) or A(2), whichever is appropriate, opposite the number of years nearest to the actual age of the measuring life. If the interest to be valued is the right to receive income of property or to use nonincome-producing property for a term of years, column 3 of Table B is used. The application of this paragraph may be illustrated by the following example: Example. The donor, a male, who during his life is entitled to receive the income from property worth $50,000, makes a gift of such interest. The donor is 31 years old on the date of the gift. The value of the gift is $43,058.50 ($50,000 × 0.86117). (d) Remainders or reversionary interests. If the interest to be valued is a remainder or reversionary interest subject to a life estate, the value of the interest should be obtained by multiplying the value of the property at the date of the gift by the figure in column 4 of Table A(1) or A(2), whichever is appropriate, opposite the number of years nearest the age of the life tenant. If the remainder or reversion is to take effect at the end of a term of years, column 4 of Table B should be used. The application of this paragraph may be illustrated by the following example: Example. The donor transfers by gift a remainder interest in property worth $50,000, subject to his sister's right to receive the income therefrom for her life. The sister at the date of the gift is 31 years of age. By reference to Table A(2), it is found that the figure in column 4 opposite age 31 is 0.10227. The value of the gift is, therefore, $5,113.50 ($50,000 × 0.10227). and Welfare, Public Health Service, except that for technical reasons Table LN employs graduated data, furnished by that Department, to increase the number of significant figures shown at ages of male lives older than 86 and female lives older than 90. Many such special factors may be found in, or computed with the use of the tables contained in, the publications entitled "Actuarial Values I: Valuation of Last Survivor Charitable Remainders" and "Actuarial Values II: Factors at 6 Percent Involving One and Two Lives." These publications may be purchased from the Superintendent of Documents, United States Government Printing Office, Washington, DC 20402. However, if a special factor is required in the case of an actual gift, the Commissioner will furnish the factor to the donor upon request. The request must be accompanied by a statement of the sex and date of birth of each person the duration of whose life may affect the value of the interest, and by copies of the relevant instruments. (f) The following tables shall be used in the application of the provisions of this section: (e) Actuarial computations by the Internal Revenue Service. If the interest to be valued is dependent upon the continuation or termination of more than one life, or there is a term certain concurrent with one or more lives, or if the retained interest of the donor is conditioned upon survivorship, a special factor is necessary. The factor is to be computed on the basis of interest at the rate of 6 percent a year, compounded annually, and life contingencies determined, as to each male and female life involved, from the values of lx that are set forth in columns 2 and 3, respectively, of Table LN of paragraph (f) of § 20.2031-10. Table LN contains values of lx taken from the life table for total males and the life table for total females appearing as Tables 2 and 3, respectively, in United States Life Tables: 1959-61, published by the Department of Health, Education, [T.D. 7077, 35 F.R. 18464, Dec. 4, 1970] § 25.2512-10 Valuation of life estates. terms for years, remainders and reversions in certain depreciable property. [Reserved] [T.D. 7077, 35 F.R. 18467, Dec. 4, 1970] § 25.2513 Statutory provisions; gift by husband or wife to third party; considered as made one-half by each. SEC. 2513. Gift by husband or wife to third party-(a) Considered as made one-half by each-(1) In general. A gift made by one spouse to any person other than his spouse shall, for the purposes of this chapter, be considered as made one-half by him and onehalf by his spouse, but only if at the time of the gift each spouse is a citizen or resident of the United States. This paragraph shall not apply with respect to a gift by a spouse of an interest in property if he creates in his spouse a general power of appointment, as defined in section 2514(c), over such interest. For purposes of this section, an individual shall be considered as the spouse of another individual only if he is married to such individual at the time of the gift and does not remarry during the remainder of the calendar quarter. (2) Consent of both spouses. Paragraph (1) shall apply only if both spouses have signified (under the regulations provided for in subsection (b)) their consent to the application of paragraph (1) in the case of all such gifts made during the calendar quarter by either while married to the other. (b) Manner and time of signifying consent (1) Manner. A consent under this section shall be signified in such manner as is provided under regulations prescribed by the Secretary or his delegate. (2) Time. Such consent may be so signified at any time after the close of the calendar quarter in which the gift was made, subject to the following limitations (A) The consent may not be signified after the 15th day of the second month following the close of such calendar quarter, unless before such 15th day no return has been filed for such calendar quarter by either spouse, in which case the consent may not be signified after a return for such calendar quarter is filed by either spouse; (B) The consent may not be signified after a notice of deficiency with respect to the tax for such calendar quarter has been sent to either spouse in accordance with section 6212(a). (c) Revocation of consent. Revocation of a consent previously signified shall be made in such manner as is provided under regulations prescribed by the Secretary or his delegate, but the right to revoke a consent previously signified with respect to a calendar quarter (1) Shall not exist after the 15th day of the second month following the close of such calendar quarter if the consent was signified on or before such 15th day; and (2) Shall not exist if the consent was not signified until after such 15th day. (d) Joint and several liability for tax. If the consent required by subsection (a) (2) is signified with respect to a gift made in any calendar quarter, the liability with respect to the entire tax imposed by this chapter of each spouse for such calendar quarter shall be joint and several. [Sec. 2513 as amended by sec. 102(b) (2), Excise, Estate, and Gift Tax Adjustment Act 1970 (84 Stat. 1840)] [T.D. 6334, 23 F.R. 8904, Nov. 15, 1958, as amended by T.D. 7238, 37 F.R. 28729, Dec. 29, 1972] $25.2513-1 Gifts by husband or wife to third party considered as made one-half by each. (a) A gift made by one spouse to a person other than his (or her) spouse may, for the purpose of the gift tax, be considered as made one-half by his spouse, but only if at the time of the gift each spouse was a citizen or resident of the United States. For purposes of this section, an individual is to be considered as the spouse of another individual only if he was married to such individual at the time of the gift and does not remarry during the remainder of the calendar quarter (calendar year with respect to gifts made before January 1, 1971). For the definition of calendar quarter see § 25.2502–1 (c) (1). (b) The provisions of this section will apply to gifts made during a particular calendar quarter (calendar year with respect to gifts made before January 1, 1971) only if both spouses signify their consent to treat all gifts made to third parties during that calendar quarter (or calendar year) by both spouses while married to each other as having been made one-half by each spouse. As to the manner and time for signifying consent, see § 25.2513-2. Such consent, if signified with respect to any calendar quarter (or calendar year), is effective with respect to all gifts made to third parties during such calendar quarter or calendar year except as follows: (1) If the consenting spouses were not married to each other during a portion of the calendar quarter or calendar year, the consent is not effective with respect to any gifts made during such portion of the calendar quarter or calendar year. Where the consent is signified by an executor or administrator of a deceased spouse, the consent is not effective with respect to gifts made by the surviving spouse during the portion of the calendar quarter or calendar year that his spouse was deceased. (2) If either spouse was a nonresident not a citizen of the United States during any portion of the calendar quarter or calendar year, the consent is not effective with respect to any gift made during that portion of the calendar quarter or calendar year. (3) The consent is not effective with respect to a gift by one spouse of a property interest over which he created in his spouse a general power of appointment (as defined in section 2514 (c)). (4) If one spouse transferred property in part to his spouse and in part to third parties, the consent is effective with respect to the interest transferred to third parties only insofar as such interest is ascertainable at the time of the gift and hence severable from the interest transferred to his spouse. See § 25.2512-5 for the principles to be applied in the valuation of annuities, life estates, terms for years, remainders and reversions. (5) The consent applies alike to gifts made by one spouse alone and to gifts made partly by each spouse, provided such gifts were to third parties and do not fall within any of the exceptions set |