Income Tax Regulations — 304
n or before the individual’s death as a payment under the annuity, (C) if the annuity payments are to be made over a term that is guaranteed or fixed, the guaranteed or fixed term not exceed 91 years minus the age, when the contract was first held, in whole years of the following individual: (I) if the holder is not a trust, the individual who is 1 in the case of a joint and last survivor annuity, the younger of the first holder and the survivor, 2 in the case of a contract that is held jointly, the younger of the first holders, and 3 in any other case, the first holder, (II) if the holder is a specified trust, the individual who is 1 in the case of a joint and last survivor annuity held by a joint spousal or common-law partner trust, the younger of the individuals referred to in paragraph 104(4)(a) of the Act who are in combination entitled to receive all of the income of the trust that arose before the later of their deaths, and 2 in the case of an annuity that is not a joint and last survivor annuity, the individual referred to in paragraph 104(4)(a) of the Act who is entitled to receive all of the income of the trust that arose before the individual’s death, (III) if the holder is a qualified disability trust, an individual who is an electing beneficiary of the trust for the taxation year in which the annuity is issued, and (IV) if the holder is a trust (other than a qualified disability trust or specified trust) and the annuity is issued before 2016, the individual who was the youngest beneficiary under the trust when the contract was first held, (D) no loans exist under the contract, (E) the holder’s rights under the contract not be disposed of otherwise than (I) if the holder is an individual, on the holder’s death, (II) if the holder is a specified trust (other than a joint spousal or common-law partner trust), on the death of the individual referred to in paragraph 104(4)(a) of the Act who is entitled to receive all of the income of the trust that arose before the individual’s death, (III) if the holder is a specified trust that is a joint spousal or common-law partner trust, on the later of the deaths of the individuals referred to in paragraph 104(4)(a) of the Act who are in combination entitled to receive all of the income of the trust that arose before the later of their deaths, and (IV) if the holder is a trust, other than a specified trust, and the contract is first held after October 2011, on the earlier of 1 the time at which the trust ceases to be a testamentary trust, and 2 the death of the individual referred to in subclause (B)(II) or (C)(III) or (IV), as the case may be, in respect of the trust, and (F) no payments be made out of the contract other than as permitted by this section, (v) none of the terms and conditions of which provide for any recourse against the issuer for failure to make any payment under the contract, and (vi) where annuity payments under the contract have commenced (A) before 1987, in respect of which a holder thereof has notified the issuer in writing, before the end of the taxation year, that the contract is to be treated as a prescribed annuity contract, (B) after 1986, in respect of which a holder thereof has not notified the issuer in writing, before the end of the taxation year in which the annuity payments under the contract commenced, that the contract is not to be treated as a prescribed annuity contract, or (C) after 1986, in respect of which a holder thereof has notified the issuer in writing, before the end of the taxation year in which the annuity payments under the contract commenced, that the contract is not to be treated as a prescribed annuity contract and a holder thereof has rescinded the notification by so notifying the issuer in writing before the end of the taxation year. (2) Notwithstanding subsection (1), an annuity contract shall not fail to be a prescribed annuity contract by reason that (a) where the contract provides for a joint and last survivor annuity o