Page:United States Statutes at Large Volume 95.djvu/329

 PUBLIC LAW 97-34—AUG. 13, 1981

95 STAT. 303

"(iv) SPECIFIC PORTION TREATED AS SEPARATE PROP-

ERTY.—A specific portion of property shall be treated as separate property. "(v) ELECTION.—An election under this paragraph with respect to any property shall be made by the executor on the return of tax imposed by section 2001. Such an election, once made, shall be irrevocable. "(8) SPECIAL RULE FOR CHARITABLE REMAINDER TRUSTS.—

"(A) IN GENERAL.—If the surviving spouse of the decedent is the only noncharitable beneficiary of a qualified charitable remainder trust, paragraph (1) shall not apply to any interest in such trust which passes or has passed from the decedent to such surviving spouse. "(B) DEFINITIONS.—For purposes of subparagraph (A)— "(i) NONCHARITABLE BENEFICIARY.—The term 'noncharitable beneficiary' means any beneficiary of the qualified charitable remainder trust other than an organization described in section 170(c). "(ii) QUALIFIED CHARITABLE REMAINDER TRUST.—The

term 'qualified charitable remainder trust' means a charitable remainder annuity trust or charitable remainder unitrust (described in section 664)." (2) GIFT TAX.—Section 2523 is amended by adding at the end 26 USC 2523. thereof the following new subsections: "(f) ELECTION WITH RESPECT TO LIFE ESTATE FOR DONEE SPOUSE.—

"(1) IN GENERAL.—In the case of qualified terminable interest property— "(A) for purposes of subsection (a), such property shall be treated as transferred to the donee spouse, and "(B) for purposes of subsection (b)(1), no part of such property shall be considered as retained in the donor or transferred to any person other than the donee spouse. "(2) QUALIFIED TERMINABLE INTEREST PROPERTY.—For purposes

of this subsection, the term 'qualified terminable interest property' means any property— "(A) which is transferred by the donor spouse, "(B) in which the donee spouse has a qualifying income interest for life, and "(C) to which an election under this subsection applies. "(3) CERTAIN RULES MADE APPLICABLE.—For purposes of this subsection, the rules of clauses (ii), (iii), and (iv) of section 2056(b)(7)(B) shall apply. "(4) ELECTION.—An election under this subsection with respect to any property shall be made on the return of the tax imposed by section 2501 for the calendar year in which the interest was transferred. Such an election, once made, shall be irrevocable. "(g) SPECIAL RULE FOR CHARITABLE REMAINDER TRUSTS.—

"(1) IN GENERAL.—If, after the transfer, the donee spouse is the only noncharitable beneficiary (other than the donor) of a qualified remainder trust, subsection (b) shall not apply to the interest in such trust which is transferred to the donee spouse. "(2) DEFINITIONS.—For purposes of paragraph (1), the term 'noncharitable beneficiary' and 'qualified charitable remainder trust' have the meanings given to such terms by section 2056(b)(8)(B)." (3) TREATMENT OF SPOUSE.— (A) INCLUSION IN GROSS ESTATE.—

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