[Code of Federal Regulations]
[Title 26, Volume 14]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR25.2523(g)-1]

[Page 621-622]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 25_GIFT TAX; GIFTS MADE AFTER DECEMBER 31, 1954--Table of Contents
 
Sec.  25.2523(g)-1  Special rule for charitable remainder trusts.

    (a) In general. (1) With respect to gifts made after December 31, 
1981, subject to section 2523(i), if the donor's spouse is the only 
noncharitable beneficiary (other than the donor) of a charitable 
remainder annuity trust or charitable remainder unitrust described in 
section 664 (qualified charitable remainder trust), section 2523(b) does 
not apply to the interest in the trust transferred to the donee spouse. 
Thus, the value of the annuity or unitrust interest passing to the 
spouse qualifies for a marital deduction under section 2523(g) and the 
value of the remainder interest qualifies for a charitable deduction 
under section 2522.
    (2) A marital deduction for the value of the donee spouse's annuity 
or unitrust interest in a qualified charitable remainder trust to which 
section 2523(g) applies is allowable only under section 2523(g). 
Therefore, if an interest in property qualifies for a marital deduction 
under section 2523(g), no election may be made with respect to the 
property under section 2523(f).
    (3) The donee spouse's interest need not be an interest for life to 
qualify for a marital deduction under section 2523(g). However, for 
purposes of section 664, an annuity or unitrust interest payable to the 
spouse for a term of years cannot be payable for a term that exceeds 20 
years or the trust does not qualify under section 2523(g).
    (4) A deduction is allowed under section 2523(g) even if the 
transfer to the donee spouse is conditioned on the donee spouse's 
payment of state death taxes, if any, attributable to the qualified 
charitable remainder trust.
    (5) For purposes of this section, the term noncharitable beneficiary 
means any beneficiary of the qualified charitable remainder trust other 
than an organization described in section 170(c).
    (b) Charitable remainder trusts where the donee spouse and the donor 
are not the only noncharitable beneficiaries. In the case of a 
charitable remainder trust where the donor and the donor's spouse are 
not the only noncharitable beneficiaries (for example, where the 
noncharitable interest is payable to the donor's spouse for life and 
then to another individual (other than the donor) for life), the 
qualification of the interest as qualified terminable interest property 
is determined solely under section 2523(f) and not under section 
2523(g). Accordingly, if the transfer to the trust is made prior to 
October 24,

[[Page 622]]

1992, the spousal annuity or unitrust interest may qualify under Sec.  
25.2523(f)-(1)(c)(3) as a qualifying income interest for life.

[T.D. 8522, 59 FR 9663, Mar. 1, 1994]