Re: 3-year Rule

From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: 3-year Rule
Date: Fri, 4 Sep 1998 16:08:24 -0400

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From CCH's 1998 US Master Tax Guide:

"Gifts made within three years of the donor's ordinarily are not
includable in the donor's gross estate.  However, gifts made within
three years of death are included in his gross estate if the gift
consists of interests in property that would otherwise be included in
his gross estate because of the donor's retained powers, such as the power
to alter, amend, revoke, or terminate the gift [26 USC 2035(a)].  The gross
estate of a decedent dying after August 5, 1997, however, does not include
transfers from a revocable trust made within three years of the decedent's
death [26 USC 2035(e)].  Such transfers will be treated as if made 
directly by the decedent [26 USC 2038]..."

Also keep in mind that individual states can have their own rules about
how gifts are pulled back into an estate for tax purposes.

Rich Carreiro
rlcarr@animato.pn.com
P5-100/RedHat Linux 4.1



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