No, at least not at the time of death. Revenue Ruling 92-68
1 revoked Revenue Ruling 81-31,
2 in which the IRS treated an employee as making a gift of the benefit from a DBO plan in the year of the employee’s death.
3 Note that neither Revenue Ruling 81-31 nor
Estate of DiMarco v. Commissioner addressed whether an employee should be treated each year as (1) receiving compensation equal to the value of providing a death benefit or survivor income benefit to an eligible survivor if the employee died during the year, and (2) transferring such value to the eligible survivor. The use of the annual exclusion and the marital deduction might protect such a gift from any gift tax. (
See Q
101 for estate tax aspects.)
1. Rev. Rul. 92-68, 1992-2 CB 257, revoking Rev. Rul. 81-31, below.
2. Rev. Rul. 81-31, 1981-1 CB 475.
3. Estate of DiMarco v. Commissioner, 87 TC 653 (1986), acq. in result, 1990-2 CB 1.