Page:United States Statutes at Large Volume 113 Part 3.djvu/419

 PUBLIC LAW 106-170—DEC. 17, 1999 113 STAT. 1937 annuity, or endowment contract if any direct or indirect beneficiary under such contract is the transferor, any member of the transferor's family, or any other person (other than an organization described in subsection (c)) designated by the transferor. "(C) APPLICATION TO CHARITABLE REMAINDER TRUSTS.— In the case of a transfer to a trust referred to in subparagraph (E), references in subparagraphs (A) and (F) to an organization described in subsection (c) shall be treated as a reference to such trust. " (D) EXCEPTION FOR CERTAIN ANNUITY CONTRACTS.— If, in connection with a transfer to or for the use of an organization described in subsection (c), such organization incurs an obligation to pay a charitable gift annuity (as defined in section 501(m)) and such organization purchases any annuity contract to fund such obligation, persons receiving payments under the charitable gift annuity shall not be treated for purposes of subparagraph (B) as indirect beneficiaries under such contract if— "(i) such organization possesses all of the incidents of ownership under such contract, "(ii) such organization is entitled to all the pay- ments under such contract, and "(iii) the timing and amount of pa3maents under such contract are substantially the same as the timing and amount of payments to each such person under ' such obligation (as such obligation is in effect at the time of such transfer). "(E) EXCEPTION FOR CERTAIN CONTRACTS HELD BY CHARITABLE REMAINDER TRUSTS.— A person shall not be treated for purposes of subparagraph (B) as an indirect beneficiary under any life insurance, annuity, or. endowment contract held by a charitable remainder annuity trust or a charitable remainder unitrust (as defined in section 664(d)) solely by reason of being entitled to any payment referred to in paragraph (1)(A) or (2)(A) of section 664(d) if— "(i) such trust possesses all of the incidents of ownership under such contract, and "(ii) such trust is entitled to all the payments under such contract. "(F) EXCISE TAX ON PREMIUMS PAID.— "(i) IN GENERAL.— T here is hereby imposed on any organization described in subsection (c) an excise tax equal to the premiums paid by such organization on any life insurance, annuity, or endowment contract if the payment of premiums on such contract is in connection with a transfer for which a deduction is not allowable under subparagraph (A), determined without regard to when such transfer is made. " (ii) PAYMENTS BY OTHER PERSONS.—For purposes of clause (i), payments made by any other person pursuant to an understanding or expectation referred to in subparagraph (A) shall be treated as made by the organization.

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