Estate Tax Consequences to Contributor Sample Clauses

Estate Tax Consequences to Contributor. If the Contributor is an income beneficiary of the contribution he or she makes to the Fund, or if the Contributor retains the right to terminate or revoke (only by will) another beneficiary's income interest in the Fund, then at the death of the Contributor, the Contributor's entire interest in the Fund is included in the Contributor's gross estate for federal estate tax purposes under Code section 2036(a). The Contributor's "entire interest in the Fund" is the value at the time of the Contributor's death of the units attributable to the gift the Contributor made to the Fund. Because the Contributor's units will pass over to the Fund, it must be included in the Contributor's gross estate; however, if the Contributor was the sole income beneficiary, the Contributor's estate should be able to utilize the estate tax charitable deduction for the full value of the units. If a noncharitable, succeeding beneficiary will continue to receive the Contributor's income interest after the Contributor's death, then the estate tax charitable deduction allowable to the Contributor's estate is limited to the present value of CCS's remainder interest. Thus, the then present value of the succeeding beneficiary's lifetime interest is subject to the estate tax. If the only noncharitable, succeeding beneficiary is the Contributor's spouse and an election is made to treat the contribution to the Fund as a QTIP contribution, then the Contributor's estate should be able to take the estate tax marital deduction for the value of the units in the Fund, which will pass over to the surviving spouse. It is important to note that even if the charitable and marital deductions eliminate any tax, inclusion of amounts from the Fund may cause the Contributor's estate to be required to file an estate tax return that otherwise would be unnecessary. If inclusion of amounts from the Fund causes the Contributor's gross estate to exceed the unified estate tax credit, then an estate tax return must be filed.
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Related to Estate Tax Consequences to Contributor

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