115 STAT. 88 PUBLIC LAW 107-16-JUNE 7, 2001 amount of an interest in the form of the right to receive annual payments of a fixed percentage of the net fair market value of the trust property (determined yearly) and which is required to pay principal to a non-skip person if such person is alive when the yearly payments for which the deduction was allowed terminate. For purposes of this subparagraph, the value of transferred property shall not be considered to be includible in the gross estate of a non-skip person or subject to a right of withdrawal by reason of such person holding a right to withdraw so much of such property as does not exceed the amount referred to in section 2503(b) with respect to any transferor, and it shall be assumed that powers of appointment held by non-skip persons will not be exercised. " (4) AUTOMATIC ALLOCATIONS TO CERTAIN GST TRUSTS.— For purposes of this subsection, an indirect skip to which section 2642(f) applies shall be deemed to have been made only at the close of the estate tax inclusion period. The fair market value of such transfer shall be the fair market value of the trust property at the close of the estate tax inclusion period. "(5) APPLICABILITY AND EFFECT. — " (A) IN GENERAL.— An individual— "(i) may elect to have this subsection not apply to— "(I) an indirect skip, or "(II) any or all transfers made by such individual to a particular trust, and "(ii) may elect to treat any trust as a GST trust for purposes of this subsection with respect to any or all transfers made by such individual to such trust. " (B) ELECTIONS. — "(i) ELECTIONS WITH RESPECT TO INDIRECT SKIPS.— An election under subparagraph (A)(i)(I) shall be deemed to be timely if filed on a timely filed gift tax return for the calendar year in which the transfer was made or deemed to have been made pursuant to paragraph (4) or on such later date or dates as may be prescribed by the Secretary. "(ii) OTHER ELECTIONS.— An election under clause (i)(II) or (ii) of subparagraph (A) may be made on a timely filed gift tax return for the calendar year for which the election is to become effective. " (d) RETROACTIVE ALLOCATIONS.— " (1) IN GENERAL.— I f^ "(A) a non-skip person has an interest or a future interest in a trust to which any transfer has been made, "(B) such person— "(i) is a lineal descendant of a grandparent of the transferor or of a grandparent of the transferor's spouse or former spouse, and "(ii) is assigned to a generation below the generation assignment of the transferor, and "(C) such person predeceases the transferor,
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