Tax Facts

629 / If a person makes a gift of an immediate annuity, will the value of any refund be includable in the donee-annuitant’s estate?

Updated: December 18, 2024 at 08:56 AM
If a donor irrevocably names one person to receive the income for life and irrevocably names another to receive the refund, the value of the refund at the donee-annuitant’s death should not be includable in the donee-annuitant’s gross estate. IRC Section 2039 is not applicable because the donee-annuitant is not the purchaser of the contract ( Q 620).


However, if the refund is payable to the donee or the donee’s estate (or the donee can otherwise direct where the refund goes), it will generally be included in the donee’s estate for estate tax purposes.


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