Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 65-20

1965-1 C.B. 124

Full Text

Rev. Rul. 65-20 /1/

Section 170(f) of the Internal Revenue Code of 1954, added by section 209(e) of the Revenue Act of 1964, Public Law 88-272, C.B. 1964-1 (Part 2), 6, at 28, provides that the payment of a charitable contribution consisting of a future interest in tangible personal property (made after December 31, 1963, in taxable years ending after that date) is treated as made only when all intervening interests in, and rights to the actual possession or enjoyment of, the property have expired or are held by persons other than the taxpayer described in section 267(b) of the Code.

However, section 209(f) of the Revenue Act of 1964 provides that section 170(f) of the Code shall not apply to such a contribution made before July 1, 1964, where the sole intervening interest or right is a nontransferable life interest reserved by the donor which expires upon the donor's death, or in the case of a joint gift by husband and wife, the sole surviving interest or right is a nontransferable life interest reserved by the donors which expires not later than the death of whichever of such donors dies later. The right to transfer the reserved life interest to the donee of the future interest is not treated as making a life estate transferable.

Where the deed of gift or other instrument of transfer contains a provision which provides for the forfeiture or termination of the reserved life interest upon its alienation or attempted alienation, the requirements of section 209(f) of the Revenue Act of 1964 will be considered to have been met.

/1/ Based on Technical Information Release 662, dated Dec. 9, 1964.