PUBLIC LAW 100-647—NOV. 10, 1988
102 STAT. 3563
(3)(A) Section 2642 of the 1986 Ckxie is amended by adding a t the end thereof the following new subsection: (e) SPECIAL RULES FOR CHARITABLE LEAD ANNUITY TRUSTS.—
"(1) IN GENERAL.—For purposes of determining the inclusion ratio for any charitable lead annuity trust, the applicable fraction shall be a fraction— "(A) the numerator of which is the adjusted GST exemption, and "OB) the denominator of which is the value of all of the property in such trust immediately after the termination of the charitable lead annuity. "(2) ADJUSTED GST EXEMPTION.—For purposes of paragraph (1),
the adjusted GST exemption is a n amount equal to the GST exemption allocated to the trust increased by interest determined— "(A) a t the interest rate used in determining the amount of the deduction under section 2055 or 2522 (as the case may be) for the charitable lead annuity, and "(B) for the actual period of the charitable lead annuity. "(3) DEFINITIONS.—For purposes of this subsection— "(A) CHARITABLE LEAD ANNUITY TRUST.—The term 'charitable lead annuity trust' means any trust in which there is a charitable lead annuity. "(B) CHARITABLE LEAD ANNUITY.—The term 'charitable lead annuity' means any interest in the form of a guaranteed annuity with respect to which a deduction was allowed under section 2055 or 2522 (as the case may be). "(4) COORDINATION WITH SUBSECTION (d).—Under regulations, appropriate adjustments shall be made in the application of subsection (d) to take into account the provisions of this subsection." (B) The amendment made by subparagraph (A) shall apply for 26 USC 2642 purposes of determining the inclusion ratio with respect to note. property transferred after October 13, 1987. (4)(A) Section 2642 of the 1986 Code is amended by adding a t the end thereof the following new subsection: "(f) SPECIAL RULES FOR CERTAIN INTER VIVOS TRANSFERS.—Except Real property. as provided in regulations— "(1) IN GENERAL.—For purposes of determining the inclusion ratio, if— "(A) an individual makes an inter vivos transfer of property, and "(B) the value of such property would be includible in the gross estate of such individual under chapter 11 if such individual died immediately after making such transfer (other than by reason of section 2035), any allocation of GST exemption to such property shall not be made before the close of the estate tax inclusion period (and the value of such property shall be determined under paragraph (2)). If such transfer is a direct skip, such skip shall be treated as occurring as of the close of the estate tsoc inclusion period. "(2) VALUATION.—In the case of any property to which paragraph (1) applies, the value of such property s h ^ l be— "(A) tf such property is includible in the gross estate of the transferor (other than by reason of section 2035), its value for purposes of chapter 11, or
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