Generation Skipping Transfer Tax

<div class="Section1">In the case of a taxable distribution, the tax is paid by the transferee. In the case of a taxable termination or a direct skip from a trust, the tax is paid by the trustee. In the case of a direct skip (other than a direct skip from a trust), the tax is paid by the transferor. Unless the governing instrument of transfer otherwise directs, the GST tax is charged to the property constituting the transfer.<a href="#_ftn1" name="_ftnref1">¹</a></div><br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%" /><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.    IRC § 2603.<br /> <br /> </div>

<div class="Section1">For decedents dying before 2005, if a GST (other than a direct skip) occurs at the same time as and as a result of the death of an individual, a credit against the GST tax imposed is allowed in an amount equal to the GST tax paid to any state in respect to any property included in the GST, but the amount cannot exceed 5 percent of the GST tax.<a href="#_ftn1" name="_ftnref1">¹</a> The amendments made by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA 2001) sunset after December 31, 2012 so that this provision is no longer applicable. Transfers made to estates of decedents, gifts, or GST transfers are treated as if the amendments were never enacted.<a href="#_ftn2" name="_ftnref2">²</a> However, under 2010 TRA, the GST tax rate for 2010 was zero, 35 percent for 2011 and 2012 and 40 percent for 2013 and beyond. The GST exemption was $5.49 million in 2017, and was raised to $11.18 million in 2018, $11.4 million in 2019, $11.58 million in 2020, $11.7 million for 2021, $12.06 million for 2022, $12.92 million in 2023, $13.61 million in 2024 and $13.99 million in 2025 (projected) under the 2017 Tax Act.<a href="#_ftn3" name="_ftnref3">³</a></div><br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%" /><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.    IRC § 2604.<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.    IRC §§ 2604(c), 2664, as added by EGTRRA 2001.<br /> <br /> <a href="#_ftnref3" name="_ftn3">3</a>.    Rev. Proc. 2016-55, Pub. Law No. 115-97, Rev. Proc. 2018-18, Rev. Proc. 2018-57, Rev. Proc. 2019-44, Rev. Proc. 2020-45, Rev. Proc. 2021-45, Rev. Proc. 2022-38, Rev. Proc. 2023-34, Rev. Proc. 2024-40.<br /> <br /> </div>

<div class="Section1">Yes. If a split gift is made for gift tax purposes (see Q <a href="javascript:void(0)" class="accordion-cross-reference" id="905">905</a>), such gift will be so treated for purposes of the GST tax.<a href="#_ftn1" name="_ftnref1">¹</a> Split gifts allow spouses to, in effect, utilize each other&rsquo;s annual exclusions and exemptions (see Q <a href="javascript:void(0)" class="accordion-cross-reference" id="876">876</a>). One memorandum permitted a taxpayer to elect after his spouse&rsquo;s death to split gifts with his spouse and thus take advantage of his spouse&rsquo;s GST tax exemption where the gifts were made by the taxpayer shortly before the spouse&rsquo;s death.<a href="#_ftn2" name="_ftnref2">²</a><div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp;&nbsp;&nbsp; IRC &sect; 2652(a)(2).<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.&nbsp;&nbsp;&nbsp; TAM 9404023.<br /> <br /> </div></div><br />

<div class="Section1">The person required to file the return is the person liable for paying the tax (see Q <a href="javascript:void(0)" class="accordion-cross-reference" id="891">891</a>). In the case of a direct skip (other than from a trust), the return must be filed on or before the due date for the gift or estate tax return with respect to the transfer. In all other cases, the return must be filed on or before the 15th day of the fourth month after the close of the taxable year of the person required to make the return.<a href="#_ftn1" name="_ftnref1">¹</a><div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp;&nbsp;&nbsp; IRC &sect; 2662.<br /> <br /> </div></div><br />

<div class="Section1"><br /> <br /> An individual (and his spouse or former spouse) who is a lineal descendant of a grandparent of the transferor (or the transferor&rsquo;s spouse) is assigned to that generation which results from comparing the number of generations between the grandparent and such individual with the number of generations between the grandparent and the transferor (or the transferor&rsquo;s spouse). A relationship by legal adoption is treated as a relationship by blood, and a relationship by the half-blood is treated as a relationship of the whole blood.<a href="#_ftn1" name="_ftnref1">¹</a><br /> <br /> A person who could be assigned to more than one generation is assigned to the youngest generation. However, regulations provide that adopted individuals will be treated as one generation younger than the adoptive parent where: (1) a transfer is made to the adopted individual from the adoptive parent, the spouse or former spouse of the adoptive parent, or a lineal descendant of a grandparent of the adoptive parent; (2) the adopted individual is a descendant of the adoptive parent (or the spouse or former spouse of the adoptive parent); (3) the adopted individual is under age 18 at the time of adoption; and (4) the adoption is not primarily for the purpose of avoiding GST tax.<a href="#_ftn2" name="_ftnref2">²</a><br /> <br /> However, with respect to terminations, distributions, and transfers occurring after 1997, where an individual&rsquo;s parent is dead at the time of a transfer subject to gift or estate tax upon which the individual&rsquo;s interest is established or derived, such individual will be treated as being one generation below the lower of (1) the transferor&rsquo;s generation, or (2) the generation of the youngest living ancestor of the individual who is also a descendant of the parents of the transferor or the transferor&rsquo;s spouse (or former spouse). This predeceased parent rule applies to collateral relatives (e.g., nieces and nephews) only if there are no living lineal descendants of the transferor at the time of the transfer.<a href="#_ftn3" name="_ftnref3">³</a> For a narrower predeceased parent rule that applied to direct skips before 1998, see Q <a href="javascript:void(0)" class="accordion-cross-reference" id="875">875</a>.<br /> <br /> Regulations make clear that if the generation-skipping property is subject to gift tax or estate tax on more than one occasion, the time for determining application of the predeceased parent rule is on the first of such occasions. In the case of a qualified terminable interest property (QTIP) marital deduction election, the time for determining application of the predeceased parent rule can essentially wait until the surviving spouse dies or makes a gift of the QTIP property. However, where a reverse QTIP election is made, application of the predeceased parent rule is made at the time of the first spouse&rsquo;s death. Also, at times property may be transferred to a trust before the predeceased parent rule is applicable. Later, the predeceased parent rule applies to additional property transferred to the trust. The additional property is treated as being held in a separate trust for GST tax purposes. Each portion has, in effect, a separate transferor.<a href="#_ftn4" name="_ftnref4">⁴</a><br /> <br /> An individual who cannot be assigned to a generation under the foregoing rules is assigned to a generation on the basis of his date of birth. An individual born not more than 12&frac12; years after the date of birth of the transferor is assigned to the transferor&rsquo;s generation. An individual born more than 12&frac12; years but not more than 37&frac12; years after the date of birth of the transferor is assigned to the first generation younger than the transferor. There are similar rules for a new generation every 25 years.<a href="#_ftn5" name="_ftnref5">⁵</a><br /> <br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp;&nbsp;&nbsp; IRC &sect;&sect; 2651(a), 2651(b), 2651(c).<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.&nbsp;&nbsp;&nbsp; Treas. Reg. &sect; 26.2651-2.<br /> <br /> <a href="#_ftnref3" name="_ftn3">3</a>.&nbsp;&nbsp;&nbsp; IRC &sect; 2651(e).<br /> <br /> <a href="#_ftnref4" name="_ftn4">4</a>.&nbsp;&nbsp;&nbsp; Treas. Reg. &sect; 26.2651-1.<br /> <br /> <a href="#_ftnref5" name="_ftn5">5</a>.&nbsp;&nbsp;&nbsp; IRC &sect; 2651(d).<br /> <br /> </div></div><br />

<div class="Section1">Where the basis of property subject to the GST tax is increased (or decreased) to fair market value because property transferred in a taxable termination occurs at the same time and as a result of the death of an individual, any increase (or decrease) in basis is limited by multiplying such increase (or decrease) by the inclusion ratio used in allocating the GST exemption.<a href="#_ftn1" name="_ftnref1">¹</a></div><br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%" /><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.    IRC § 2654(a)(2).<br /> <br /> </div>

<div class="Section1">With respect to property transferred after October&nbsp;13, 1987, the GST tax exemption inclusion ratio for any charitable lead annuity trust (see Q <a href="javascript:void(0)" class="accordion-cross-reference" id="8104">8104</a>) is to be determined by dividing the amount of exemption allocated to the trust by the value of the property in the trust following the charitable term. For this purpose, the exemption allocated to the trust is increased by interest determined at the interest rate used in determining the amount of the estate or gift tax charitable deduction with respect to such a trust over the charitable term. With respect to a late allocation of the GST exemption (see Q <a href="javascript:void(0)" class="accordion-cross-reference" id="880">880</a>), interest accrues only from the date of the late allocation. The amount of GST exemption allocated to the trust is not reduced even though it is determined at a later time that a lesser amount of GST exemption would have produced a zero inclusion ratio.<a href="#_ftn1" name="_ftnref1">¹</a><div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp;&nbsp;&nbsp; IRC &sect; 2642(e), Treas. Reg. &sect; 26.2642-3.<br /> <br /> </div></div><br />

<div class="Section1">In general, portions of a trust are not to be treated as separate trusts. However, portions attributable to different transferors, substantially separate and independent shares of different beneficiaries of a trust, and trusts treated as separate trusts under state law are to be treated as separate trusts for GST tax purposes.<a href="#_ftn1" name="_ftnref1">¹</a> However, treatment of a single trust as separate shares for purposes of the GST tax does not permit treatment as separate trusts for purposes of filing or payment of tax, or for purposes of any other tax. Additions to, or distributions from, such a trust are allocated pro-rata among all shares unless expressly provided otherwise. In general, a separate share is not treated as such unless it exists at all times from and after creation of the trust.</div><br /> <div class="Section1"><br /> <br /> Trusts created from a qualified severance are treated as separate trusts for GST tax purposes, effective for 2001 to 2009 and for tax years beginning after 2010. A qualified severance means the division of a single trust into two or more trusts under the trust document or state law if (1) the single trust is divided on a fractional basis, and (2) in the aggregate, the terms of the new trusts provide for the same succession of interests of beneficiaries as are provided in the original trust. In the case of a trust with a GST inclusion ratio of greater than zero and less than one (i.e., the trust is partially protected from the GST by allocations of the GST exemption), a severance is a qualified severance only if the single trust is divided into two trusts, one of which receives a fractional amount equal to the GST applicable fraction multiplied by the single trust's assets. The trust receiving the fractional amount receives an inclusion ratio of zero (i.e., it is not subject to GST tax), and the other trust receives an inclusion ratio of one (i.e., it is fully subject to GST tax).<a href="#_ftn2" name="_ftnref2">²</a><br /> <br /> Otherwise, severance of a trust included in the taxable estate (or created in the transferor's will) into single shares will be recognized for GST purposes if (1) the trusts are severed pursuant to the governing instrument or state law, (2) such severance occurs (or a reformation proceeding is begun and is indicated on the estate tax return) prior to the date for filing the estate tax return (including extensions actually granted), and (3) the trusts are funded using (a) fractional interests or (b) pecuniary amounts for which appropriate adjustments are made.<a href="#_ftn3" name="_ftnref3">³</a><br /> <br /> Regulations provide that a qualified severance must be done on a fractional or percentage basis; a severance based on a specific pecuniary amount is not permitted. The terms of the new trusts must provide in the aggregate for the same succession of beneficiaries. With respect to trusts from which discretionary distributions may be made on a non pro rata basis, this requirement can be satisfied even if each permissible beneficiary might be a beneficiary of only one of the separate trusts, but only if no beneficial interest is shifted to a lower generation and the time for vesting of any beneficial interest is not extended.<a href="#_ftn4" name="_ftnref4">⁴</a><br /> <br /> The regulations provide that the separate trusts must be funded with property from the severed trust with either a pro rata portion of each asset or on a non pro rata basis. If funded on a non pro rata basis, the separate trusts must be funded by applying the appropriate severance fraction or percentage to the fair market value of all the property on the date of severance. The date of severance is either the date selected by the trustee or a court-imposed date of funding. The funding of the separate trusts must commence immediately, and occur within a reasonable period of time (not more than 90 days) after the date of severance.<br /> <br /> A qualified severance is deemed to occur before a taxable termination or a taxable distribution that occurs by reason of the qualified severance. For example, a trust provides for trust income to be paid annually to grantor's child (C) and grandchild (GC) for 10 years, remainder to C and GC or their descendants. If either dies during the trust term, income is payable to that person's then-living descendants. The inclusion ratio for the trust is .50. The trust is severed into one trust for C and C's descendants and one for GC and GC's descendants. The trustee designates the trust for C as having an inclusion ratio of one, and the trust for GC as having an inclusion ratio of zero. The severance causes either a taxable termination of C's interest in, or a taxable distribution to, GC's trust (which is a skip person). However, the severance is deemed to occur before the GST and GC's trust has an inclusion ratio of zero; therefore, there is no GST tax due.<a href="#_ftn5" name="_ftnref5">⁵</a><br /> <br /> A trust that is partly grandfathered from GST tax can be severed into a grandfathered and a nongrandfathered trust under these rules.<br /> <br /> Regulations provide that, for purpose of funding the separate trusts, assets must be valued without taking into consideration any discount or premium arising from the severance.<a href="#_ftn6" name="_ftnref6">⁶</a> For example, if the severance creates a minority interest when the separate trust receives less than the interest owned by the original trust, such a minority discount is disregarded for funding purposes.<br /> <br /> Regulations provide that, with respect to a qualified severance of a trust with an inclusion ratio that is greater than zero and less than one, one or more resulting trusts must be funded with an amount equal to the GST applicable fraction (used to determine the GST inclusion ratio for the original trust immediately before the severance) times the value of the original trust on the date of severance. Each such resulting trust receives an inclusion ratio of zero. All other resulting trusts receive an inclusion ratio of one. If two or more trusts receive an amount equal to the applicable fraction of the original trust, the trustee can select which of the resulting trusts has an inclusion ratio of zero, and which has the inclusion ratio of one. For example, if the original trust has an applicable percentage of .50 and the trust is severed into two trusts, the trustee can select which of the two resulting trusts has an inclusion ratio of zero, and which has an inclusion ratio of one.<a href="#_ftn7" name="_ftnref7">⁷</a><br /> <br /> Regulations also provide that, where a trust is severed and the severance is not qualified, the resulting trusts each receive an inclusion ratio equal to the inclusion ratio of the original trust.<a href="#_ftn8" name="_ftnref8">⁸</a><br /> <br /> Further, as provided in the regulations, for purposes of the requirements that a separate share is not treated as such unless it exists at all times from and after creation of the trust, a trust is treated as created on the date of death of the grantor if the trust is fully includable in the gross estate of the grantor for estate tax purposes. Also, if the trust document requires the mandatory severance of a trust upon the occurrence of an event (not within the discretion of any person), the resulting trusts will be treated as separate trusts for GST tax purposes. The resulting trusts each receive an inclusion ratio equal to the inclusion ratio of the original trust.<a href="#_ftn9" name="_ftnref9">⁹</a><br /> <br /> <hr /><br /> <br /> <strong>Planning Point:</strong> The advantage of having portions or shares of a trust treated as separate trusts is that the transferor can decide whether or not to allocate a portion of his GST tax exemption to each separate trust and the trustee can make distributions from the separate trusts in a way that minimizes GST tax.<br /> <br /> <hr /><br /> <br /> </div><br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%" /><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.    IRC § 2654(b).<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.    IRC § 2642(a), as added by EGTRRA 2001.<br /> <br /> <a href="#_ftnref3" name="_ftn3">3</a>.    Treas. Reg. § 26.2654-1.<br /> <br /> <a href="#_ftnref4" name="_ftn4">4</a>.    Treas. Reg. § 26.2642-6.<br /> <br /> <a href="#_ftnref5" name="_ftn5">5</a>.    Treas. Reg. § 26.2642-6(j), Ex. 8.<br /> <br /> <a href="#_ftnref6" name="_ftn6">6</a>.    Treas. Reg. § 26.2642-6(d)(4).<br /> <br /> <a href="#_ftnref7" name="_ftn7">7</a>.    Treas. Reg. § 26.2642-6(d)(7).<br /> <br /> <a href="#_ftnref8" name="_ftn8">8</a>.    Treas. Reg. § 26.2642-6(h).<br /> <br /> <a href="#_ftnref9" name="_ftn9">9</a>.    Treas. Reg. § 26.2654-1(a).<br /> <br /> </div>

<div class="Section1">A qualified terminable interest property (QTIP) election can be made to qualify property for the estate tax (see Q <a href="javascript:void(0)" class="accordion-cross-reference" id="847">847</a>) and gift tax (see Q <a href="javascript:void(0)" class="accordion-cross-reference" id="912">912</a>) marital deductions. A reverse QTIP election may be made for such property under the GST tax. The effect of making the reverse QTIP election is to have the decedent or the donor treated as the transferor (see Q <a href="javascript:void(0)" class="accordion-cross-reference" id="875">875</a>) for GST tax purposes. If a reverse QTIP election is made for property in a trust, the election must be made for all of the property in the trust. However, the Committee Report states that if the executor indicates on the federal estate tax return that separate trusts will be created, such trusts will be treated as separate trusts. In other words, separate trusts can be created so that the QTIP and reverse QTIP election can be made for different amounts, and thus minimize all transfer taxes.<a href="#_ftn1" name="_ftnref1">¹</a> See regarding Q <a href="javascript:void(0)" class="accordion-cross-reference" id="883">883</a> for more information on the creation of separate shares from a<br /> single trust.<br /> <blockquote><em>Example.</em> For example (based on a $5 million exemption) decedent (who has made $500,000 of taxable gifts protected by the unified credit) with a $10,000,000 estate leaves $4,500,000 in a credit shelter trust and $5,500,000 to his surviving spouse in a QTIP trust, reducing his estate tax to zero. (Assume each trust would be subject to GST tax to the extent that the $5,000,000 exemption is not allocated to such trust.) The executor allocates $4,500,000 of the decedent&rsquo;s $5,000,000 GST tax exemption to the credit shelter trust and makes a reverse QTIP election as to $500,000 of the QTIP property so that the decedent&rsquo;s full $5,000,000 exemption can be used. The surviving spouse&rsquo;s $5,000,000 exemption amount may then be used to protect the remaining $5,000,000 of property, and the entire $10,000,000 has escaped GST tax (assuming separate QTIP trusts of $4,500,000 and $500,000 are created).</blockquote><br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp;&nbsp;&nbsp; IRC &sect; 2652(a)(3). See Let. Ruls. 9133016, 9002014.<br /> <br /> </div></div><br />

<div class="Section1">With respect to inter vivos transfers subject at some point in time to the GST tax, the allocation of any portion of the GST tax exemption to such a transfer is postponed until the earlier of (a) the expiration of the period (not to extend beyond the transferor&rsquo;s death) during which the property being transferred would be included in the transferor&rsquo;s estate (other than by reason of the gifts within three years of death rule of IRC Section&nbsp;2035) if he died, or (b) the GST. For purposes of determining the inclusion ratio with respect to such exemption, the value of such property is: (a) its estate tax value if it is included in the transferor&rsquo;s estate (other than by reason of the three year rule of IRC Section&nbsp;2035), or (b) its value determined at the end of the ETIP. However, if the allocation of the exemption under the second valuation method is not made on a timely filed gift tax return for the year in which the ETIP ends, determination of value is postponed until such allocation is filed.<a href="#_ftn1" name="_ftnref1">¹</a><div class="Section1"><br /> <blockquote><em>Example.</em> Grantor sets up an irrevocable trust: income retained for 10 years, then life estate for children, followed by remainder to grandchildren. The valuation of property for purpose of the inclusion rule is delayed until the earlier of the expiration of the 10-year period or the transferor&rsquo;s death. If the grantor were to die during such time the property would be included in the grantor&rsquo;s estate under IRC Section&nbsp;2036(a) (see Q <a href="javascript:void(0)" class="accordion-cross-reference" id="824">824</a>). However, if the grantor survived the 10-year period and failed to make an allocation of the exemption on a timely filed gift tax return, the determination of value is postponed until the earlier of the time an allocation is filed or death.</blockquote><br /> Except as provided in regulations, for purpose of the GST tax exemption allocation rules, any reference to an individual or a transferor is generally treated as including the spouse of such individual or transferor.<a href="#_ftn2" name="_ftnref2">²</a> Thus, an ETIP includes the period during which, if death occurred, the property being transferred would be included in the estate (other than by reason of the gifts within three years of death rule of IRC Section&nbsp;2035) of the transferor or the spouse of the transferor. The property is not considered as includable in the estate of the transferor or the spouse of the transferor if the possibility of inclusion is so remote as to be negligible (i.e., less than a 5 percent actuarial probability). The property is not considered as includable in the estate of the spouse of the transferor by reason of a withdrawal power limited to the greater of $5,000 or 5 percent of the trust corpus if the withdrawal power terminates no later than 60 days after the transfer to trust. Apparently, the ETIP rules do not apply if a reverse QTIP election (see Q <a href="javascript:void(0)" class="accordion-cross-reference" id="885">885</a>) is made. The ETIP terminates on the earlier of (1) the death of the transferor; (2) the time at which no portion would be includable in the transferor&rsquo;s estate (other than by reason of IRC Section&nbsp;2035) or, in the case of the spouse who consents to a split-gift, the time at which no portion would be includable in the other spouse&rsquo;s estate; (3) the time of the GST (but only with respect to property involved in the GST); or (4) in the case of an ETIP arising because of an interest or power held by the transferor&rsquo;s spouse, at the earlier of (a) the death of the spouse, or (b) the time at which no portion would be includable in the spouse&rsquo;s estate (other than by reason of IRC Section&nbsp;2035).<a href="#_ftn3" name="_ftnref3">³</a><br /> <blockquote><em>Example.</em> Grantor sets up an irrevocable trust: income retained for the shorter of nine years or life, remainder to grandchild. Grantor and spouse elect to split the gift. If spouse dies during trust term, spouse&rsquo;s executor can allocate GST exemption to spouse&rsquo;s deemed one-half of the trust. However, the allocation is not effective until the earlier of the expiration of grantor&rsquo;s income interest or grantor&rsquo;s death.</blockquote><br /> The regulations provide that the election out of automatic allocation of GST exemption for either a direct skip or an indirect skip can be made at any time up until the due date for filing the gift tax return for the year the ETIP ends. If the transfer subject to an ETIP occurred in an earlier year, the election must specify the particular transfer. An affirmative allocation of GST exemption cannot be revoked after the due date for filing the gift tax return for the year the affirmative election is made (or after the allocation is made in the case of a late allocation), even where actual allocation is not effective until the end of an ETIP.<a href="#_ftn4" name="_ftnref4">⁴</a><br /> <br /> </div><div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp;&nbsp;&nbsp; IRC &sect; 2642(f).<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.&nbsp;&nbsp;&nbsp; IRC &sect; 2642(f)(4).<br /> <br /> <a href="#_ftnref3" name="_ftn3">3</a>.&nbsp;&nbsp;&nbsp; Treas. Reg. &sect; 26.2632-1(c).<br /> <br /> <a href="#_ftnref4" name="_ftn4">4</a>.&nbsp;&nbsp;&nbsp; Treas. Reg. &sect; 26.2632-1.<br /> <br /> </div></div><br />