Page:United States Statutes at Large Volume 115 Part 1.djvu/112

 115 STAT. 90 PUBLIC LAW 107-16^JUNE 7, 2001 of beneficiaries as are provided in the original trust. " (ii) TRUSTS WITH INCLUSION RATIO GREATER THAN ZERO. —I f a trust has an inclusion ratio of greater than zero and less than 1, a severance is a qualified severance only if the single trust is divided into two trusts, one of which receives a fractional share of the total value of all trust assets equal to the applicable fraction of the single trust immediately before the severance. In such case, the trust receiving such fractional share shall have an inclusion ratio of zero and the other trust shall have an inclusion ratio of 1. "(iii) REGULATIONS.— The term 'qualified severance' includes any other severance permitted under regulations prescribed by the Secretary. "(C) TIMING AND MANNER OF SEVERANCES. —A severance pursuant to this paragraph may be made at any Regulations. time. The Secretary shall prescribe by forms or regulations the manner in which the qualified severance shall be reported to the Secretary.". Applicability. (b) EFFECTIVE DATE. —The amendment made by this section 26 USC 2642 shall apply to severances after December 31, 2000. note. ^^ -^ SEC. 563. MODIFICATION OF CERTAIN VALUATION RULES. (a) GIFTS FOR WHICH GIFT TAX RETURN FILED OR DEEMED 26 USC 2642. ALLOCATION MADE.— Paragraph (1) of section 2642(b) (relating to valuation rules, etc.) is amended to read as follows: " (1) GIFTS FOR WHICH GIFT TAX RETURN FILED OR DEEMED ALLOCATION MADE. —If the allocation of the GST exemption to any transfers of property is made on a gift tax return filed on or before the date prescribed by section 6075(b) for such transfer or is deemed to be made under section 2632 (b)(1) or (c)(1)— "(A) the value of such property for purposes of subsection (a) shall be its value as finally determined for purposes of chapter 12 (within the meaning of section 2001(f)(2)), or, in the case of an allocation deemed to have been made at the close of an estate tax inclusion period, its value at the time of the close of the estate tax inclusion period, and "(B) such allocation shall be effective on and after the date of such transfer, or, in the case of an allocation deemed to have been made at the close of an estate tax inclusion period, on and after the close of such estate tax inclusion period.". (b) TRANSFERS AT DEATH. —Subparagraph (A) of section 2642(b)(2) is amended to read as follows: "(A) TRANSFERS AT DEATH. —If property is transferred as a result of the death of the transferor, the value of such property for purposes of subsection (a) shall be its value as finally determined for purposes of chapter 11; except that, if the requirements prescribed by the Secretary respecting allocation of post-death changes in value are not met, the value of such property shall be determined as of the time of the distribution concerned.".

�