Federal Register / Vol. 62, No. 250 / Wednesday, December 31, 1997 / Rules and Regulations 68183

of the repurchase price paid or incurred

to repurchase the obligation over its

adjusted issue price (within the

meaning of § 1.1275–1(b)) as of the

repurchase date. For the general rules

applicable to the deductibility of

repurchase premium, see § 1.163–7(c).

This paragraph (c) applies to convertible

obligations repurchased on or after

March 2, 1998.

(d) * * *

(2) * * * For a convertible obligation

repurchased on or after March 2, 1998,

a call premium specified in dollars

under the terms of the obligation is

considered to be a normal call premium

on a nonconvertible obligation if the call

premium applicable when the

obligation is repurchased does not

exceed an amount equal to the interest

(including original issue discount) that

otherwise would be deductible for the

taxable year of repurchase (determined

as if the obligation were not

repurchased). * * *

* * * * *

Par. 7. Section 1.1016–5 is amended

by revising paragraph (b) to read as

follows:

§ 1.1016–5 Miscellaneous adjustments to

basis.

* * * * *

(b) Amortizable bond premium—(1)

In general. A holder’s basis in a bond is

reduced by the amount of bond

premium used to offset qualified stated

interest income under § 1.171–2. This

reduction occurs when the holder takes

the qualified stated interest into account

under the holder’s regular method of

accounting.

(2) Special rules for taxable bonds. A

holder’s basis in a taxable bond is

reduced by the amount of bond

premium allowed as a deduction under

§ 1.171–3(c)(5)(ii) (relating to the

issuer’s call of a taxable bond) or under

§ 1.171–2(a)(4)(i)(A) (relating to excess

bond premium).

(3) Special rule for tax-exempt

obligations. A holder’s basis in a taxexempt obligation is reduced by the

amount of excess bond premium that is

treated as a nondeductible loss under

§ 1.171–2(a)(4)(ii).

* * * * *

§ 1.1016–9 [Removed]

Par. 8. Section 1.1016–9 is removed.

Par. 9. Section 1.1275–1 is amended

by:

1. Redesignating paragraph (b)(2) as

paragraph (b)(3).

2. Adding a new paragraph (b)(2).

The addition reads as follows:

§ 1.1275–1 Definitions.

* * * * *

(b) * * *

(2) Bond issuance premium. If a debt

instrument is issued with bond issuance

premium (as defined in § 1.163–13(c)),

for purposes of determining the issuer’s

adjusted issue price, the adjusted issue

price determined under paragraph (b)(1)

of this section is also decreased by the

amount of bond issuance premium

previously allocable under § 1.163–

13(d)(3).

* * * * *

PART 602—OMB CONTROL NUMBERS

UNDER THE PAPERWORK

REDUCTION ACT

Par. 10. The authority citation for part

602 continues to read as follows:

Authority: 26 U.S.C. 7805.

Par. 11. Section 602.101, paragraph

(c) is amended by:

1. Removing the following entry from

the table:

§ 602.101 OMB Control numbers.

* * * * *

(c) * * *

CFR part or section where

identified and described

Current

OMB control No.

* * * * *

1.171–3 ..................................... 1545–0172

* * * * *

2. Adding entries in numerical order

to the table to read as follows:

§ 602.101 OMB Control numbers.

* * * * *

(c) * * *

CFR part or section where

identified and described

Current

OMB control No.

* * * * *

1.163–13 ................................... 1545–1491

* * * * *

1.171–4 ..................................... 1545–1491

1.171–5 ..................................... 1545–1491

* * * * *

Michael P. Dolan,

Acting Commissioner of Internal Revenue.

Approved: December 15, 1997.

Donald C. Lubick,

Acting Assistant Secretary of the Treasury.

[FR Doc. 97–33647 Filed 12–30–97; 8:45 am]

BILLING CODE 4830–01–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 20 and 25

[TD 8744]

RIN 1545–AR52

Disclaimer of Interests and Powers

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Final regulations.

SUMMARY: This document contains final

regulations relating to the treatment of

disclaimers for estate and gift tax

purposes. The regulations clarify certain

provisions governing the disclaimer of

property interests and powers and, in

addition, conform the regulations to

court decisions holding the current

regulation invalid with respect to the

disclaimer of joint property interests.

The final regulations will affect persons

who disclaim property interests,

powers, or interests in jointly owned

property.

DATES: Effective date:

The final regulations are effective

December 31, 1997.

Applicability dates: The amendments

to §§ 25.2518–1(a) and 25.2518–2(c)(3)

(substituting the statutory language in

section 2518(b)(2)(A) ‘‘transfer creating

the interest,’’ for ‘‘taxable transfer’’) and

conforming changes to §§ 20.2041–

3(d)(6)(i), 20.2046–1, 20.2056(d)–2(a)

and (b), 25.2511–1(c)(1), 25.2514–

3(c)(5), are applicable for transfers

creating the interest or power to be

disclaimed made on or after December

31, 1997. The amendments to

§ 25.2518–2(c)(4) (relating to the

disclaimer of joint property and bank

accounts) are applicable for disclaimers

made on or after December 31, 1997.

FOR FURTHER INFORMATION CONTACT:

James F. Hogan (202) 622–3090 (not a

toll-free number).

SUPPLEMENTARY INFORMATION:

Background

On August 21, 1996, the IRS

published in the Federal Register (61

FR 43197) a notice of proposed

rulemaking (REG–208216–91) amending

the regulations under section 2518. The

IRS received comments on the proposed

regulations; however, no request for a

public hearing was received so no

public hearing was held. This document

adopts final regulations with respect to

this notice of proposed rulemaking.

The proposed regulations substituted

the statutory language of section

2518(b)(2)(A), ‘‘transfer creating the

interest,’’ for ‘‘taxable transfer’’ as the
68184 Federal Register / Vol. 62, No. 250 / Wednesday, December 31, 1997 / Rules and Regulations

reference point for determining when

the 9-month time period for making the

disclaimer commences. This change

clarifies that the starting point for the 9-

month period is not dependent on the

actual imposition of a transfer tax at the

time that the interest to be disclaimed

is created. Comments with respect to the

clarification in the proposed regulation

supported the change.

Under the proposed regulations, the

one-half survivorship interest in jointlyheld property that was unilaterally

severable could be disclaimed within 9

months of the date of death of the first

joint tenant to die. The proposed

regulations did not extend the same

treatment to joint interests that are not

unilaterally severable (e.g., tenancies by

the entirety), but the preamble invited

comments on this subject.

The comments received unanimously

suggested that a surviving joint tenant

should be allowed to disclaim, within 9

months of the date of death of the first

joint tenant to die, his or her

survivorship interest in a tenancy,

whether or not that tenancy is

unilaterally severable. The comments

noted that parties purchasing a

residence often do not make an

informed decision regarding whether

the residence should be held as joint

tenants or tenants by the entirety, and

generally are not aware that the decision

to take title to the property as either

joint tenants with right of survivorship

or tenants by the entirety will affect the

ability to disclaim their interest in the

property after the death of the first joint

tenant to die.

Accordingly, the final regulations

allow the disclaimer of jointly-held

property that is not unilaterally

severable on the same basis as joint

property that is unilaterally severable.

Thus, a surviving joint tenant may

disclaim the one-half survivorship

interest in property that the joint tenant

held either in joint tenancy with right of

survivorship or in tenancy by the

entirety, within 9 months of the death

of the first joint tenant to die. The rule

also significantly simplifies the

disclaimer of jointly-held property,

eliminating certain special rules that

were dependent on the application of

section 2515 to the creation of the

tenancy.

The proposed regulations provided

rules regarding the disclaimer of

interests in joint bank accounts and

brokerage accounts, generally

recognizing that the creation of such

accounts are not completed gifts under

certain circumstances. Comments noted

that other kinds of investment accounts,

such as accounts held at mutual funds,

accord the parties rights that are similar

to the rights of parties with respect to

joint bank accounts and brokerage

accounts. Accordingly, the final

regulations have expanded the special

rule with respect to the disclaimer of

jointly-held bank and brokerage

accounts to include jointly-held

investment accounts such as accounts

held at mutual funds.

Special Analyses

It has been determined that this

Treasury decision is not a significant

regulatory action as defined in EO

12866. Therefore, a regulatory

assessment is not required. It also has

been determined that section 553(b) of

the Administrative Procedure Act (5

U.S.C. chapter 5) does not apply to these

regulations, and because these

regulations do not impose a collection

of information on small entities, the

Regulatory Flexibility Act (5 U.S.C.

chapter 6) does not apply. Pursuant to

section 7805(f) of the Internal Revenue

Code, the Notice of Proposed

Rulemaking preceding these regulations

was submitted to the Small Business

Administration for comment on their

impact on small business.

Drafting Information

The principal author of these

regulations is Dale Carlton, Office of the

Chief Counsel, IRS. Other personnel

from the IRS and Treasury Department

participated in their development.

List of Subjects

26 CFR Part 20

Estate taxes, Reporting and

recordkeeping requirements.

26 CFR Part 25

Gift taxes, Reporting and

recordkeeping requirements.

Adoption of Amendments to the

Regulations

Accordingly, 26 CFR parts 20 and 25

are amended as follows:

PART 20—ESTATE TAX; ESTATES OF

DECEDENTS DYING AFTER AUGUST

16, 1954

PARAGRAPH 1. The authority citation

for part 20 continues to read in part as

follows:

Authority: 26 U.S.C. 7805 * * *

PAR. 2. Section 20.2041–3 is amended

as follows:

1. Paragraph (d)(6)(i) is amended by

revising the first sentence and by adding

a new sentence after the first sentence.

2. Paragraph (d)(6)(iii) is added.

The additions and revisions read as

follows:

§ 20.2041–3 Powers of appointment

created after October 21, 1942.

* * * * *

(d) * * *

(6)(i) A disclaimer or renunciation of

a general power of appointment created

in a transfer made after December 31,

1976, is not considered to be the release

of the power if the disclaimer or

renunciation is a qualified disclaimer as

described in section 2518 and the

corresponding regulations. For rules

relating to when the transfer creating the

power occurs, see § 25.2518–2(c)(3) of

this chapter. * * *

* * * * *

(iii) The first and second sentences of

paragraph (d)(6)(i) of this section are

applicable for transfers creating the

power to be disclaimed made on or after

December 31, 1997.

* * * * *

Par. 3. Section 20.2046–1 is revised to

read as follows:

§ 20.2046–1 Disclaimed property.

(a) This section shall apply to the

disclaimer or renunciation of an interest

in the person disclaiming by a transfer

made after December 31, 1976. For rules

relating to when the transfer creating the

interest occurs, see § 25.2518–2(c)(3)

and (c)(4) of this chapter. If a qualified

disclaimer is made with respect to such

a transfer, the Federal estate tax

provisions are to apply with respect to

the property interest disclaimed as if the

interest had never been transferred to

the person making the disclaimer. See

section 2518 and the corresponding

regulations for rules relating to a

qualified disclaimer.

(b) The first and second sentences of

this section are applicable for transfers

creating the interest to be disclaimed

made on or after December 31, 1997.

Par. 4. Section 20.2056(d)–2 is

amended as follows:

1. Paragraph (a) is amended by

revising the first sentence and adding a

new sentence after the first sentence.

2. Paragraph (b) is revised.

3. A new paragraph (c) is added.

The additions and revisions read as

follows:

§ 20.2056(d)–2 Marital deduction; effect of

disclaimers of post-December 31, 1976

transfers.

(a) * * * If a surviving spouse

disclaims an interest in property passing

to such spouse from the decedent,

which interest was created in a transfer

made after December 31, 1976, the

effectiveness of the disclaimer will be

determined by section 2518 and the

corresponding regulations. For rules

relating to when the transfer creating the
Federal Register / Vol. 62, No. 250 / Wednesday, December 31, 1997 / Rules and Regulations 68185

interest occurs, see § 25.2518–2(c)(3)

and (c)(4) of this chapter. * * *

(b) Disclaimer by a person other than

a surviving spouse. If an interest in

property passes from a decedent to a

person other than the surviving spouse,

and the interest is created in a transfer

made after December 31, 1976, and—

(1) The person other than the

surviving spouse makes a qualified

disclaimer with respect to such interest;

and

(2) The surviving spouse is entitled to

such interest in property as a result of

such disclaimer, the disclaimed interest

is treated as passing directly from the

decedent to the surviving spouse. For

rules relating to when the transfer

creating the interest occurs, see

§ 25.2518–2(c)(3) and (c)(4) of this

chapter.

(c) Effective date. The first and second

sentences of paragraphs (a) and (b) of

this section are applicable for transfers

creating the interest to be disclaimed

made on or after December 31, 1997.

PART 25—GIFT TAX; GIFTS MADE

AFTER DECEMBER 31, 1954

Par. 5. The authority citation for part

25 is amended by adding an entry in

numerical order to read as follows:

Authority: 26 U.S.C. 7805 * * *

Section 25.2518–2 is also issued

under 26 U.S.C. 2518(b). * * *

Par. 6. Section 25.2511–1 is amended

as follows:

1. In paragraph (c)(1), the fourth

sentence is revised.

2. A new paragraph (c)(3) is added.

The additions and revisions read as

follows:

§ 25.2511–1 Transfers in general.

* * * * *

(c)(1) * * * However, in the case of

a transfer creating an interest in

property (within the meaning of

§ 25.2518–2(c)(3) and (c)(4)) made after

December 31, 1976, this paragraph (c)(1)

shall not apply to the donee if, as a

result of a qualified disclaimer by the

donee, the interest passes to a different

donee. * * *

* * * * *

(3) The fourth sentence of paragraph

(c)(1) of this section is applicable for

transfers creating an interest to be

disclaimed made on or after December

31, 1997.

* * * * *

Par. 7. Section 25.2514–3 is amended

as follows:

1. Paragraph (c)(5) is amended by

revising the first sentence and adding a

new sentence after the first sentence.

2. A new paragraph (c)(7) is added.

The additions and revisions read as

follows:

§ 25.2514–3 Powers of appointment

created after October 21, 1942.

* * * * *

(c) * * *

(5) * * * A disclaimer or

renunciation of a general power of

appointment created in a transfer made

after December 31, 1976, is not

considered a release of the power for gift

tax purposes if the disclaimer or

renunciation is a qualified disclaimer as

described in section 2518 and the

corresponding regulations. For rules

relating to when a transfer creating the

power occurs, see § 25.2518–2(c)(3).

* * *

* * * * *

(7) The first and second sentences of

paragraph (c)(5) of this section are

applicable for transfers creating the

power to be disclaimed made on or after

December 31, 1997.

* * * * *

Par. 8. Section 25.2518–1 is amended

as follows:

1. Paragraph (a)(1) is revised.

2. In paragraph (a)(2), the last three

sentences of the example are removed

and four new sentences are added in

their place.

3. A new paragraph (a)(3) is added.

The additions and revisions read as

follows:

§ 25.2518–1 Qualified disclaimers of

property; In general.

(a) * * * (1) In general. The rules

described in this section, § 25.2518–2,

and § 25.2518–3 apply to the qualified

disclaimer of an interest in property

which is created in the person

disclaiming by a transfer made after

December 31, 1976. In general, a

qualified disclaimer is an irrevocable

and unqualified refusal to accept the

ownership of an interest in property.

For rules relating to the determination

of when a transfer creating an interest

occurs, see § 25.2518–2(c) (3) and (4).

(2) * * *

Example. * * * The transfer creating the

remainder interest in the trust occurred in

1968. See § 25.2511–1(c)(2). Therefore,

section 2518 does not apply to the disclaimer

of the remainder interest because the transfer

creating the interest was made prior to

January 1, 1977. If, however, W had caused

the gift to be incomplete by also retaining the

power to designate the person or persons to

receive the trust principal at death, and, as

a result, no transfer (within the meaning of

§ 25.2511–1(c)(2)) of the remainder interest

was made at the time of the creation of the

trust, section 2518 would apply to any

disclaimer made after W’s death with respect

to an interest in the trust property.

(3) Paragraph (a)(1) of this section is

applicable for transfers creating the

interest to be disclaimed made on or

after December 31, 1997.

* * * * *

Par. 9. Section 25.2518–2 is amended

as follows:

1. The text of paragraph (c)(3)

following the heading is redesignated as

paragraph (c)(3)(i) and amended as

follows:

a. In the first, eighth, and eleventh

sentences, the word ‘‘taxable’’ is

removed in each place it appears.

b. In the second and ninth sentences,

the language ‘‘taxable transfer’’ is

removed and ‘‘transfer creating an

interest’’ is added in each place it

appears.

c. In the third sentence the language

‘‘taxable transfers’’ is removed and

‘‘transfers creating an interest’’ is added.

d. The fourth, fifth, sixth, and seventh

sentences are removed and five new

sentences are added in their place.

2–3. A new paragraph (c)(3)(ii) is

added.

4. Paragraph (c)(4) is revised.

5. In paragraph (c)(5), Example (7) is

revised.

6. In paragraph (c)(5), Example (8) is

removed.

7. In paragraph (c)(5), Example (9) is

redesignated as Example (12) and is

revised.

8. In paragraph (c)(5), Example (10) is

redesignated as Example (11) and the

first sentence is revised.

9. In paragraph (c)(5), new Examples

(8), (9), (10), (13), and (14), are added.

The additions and revisions read as

follows:

§ 25.2518–2 Requirements for a qualified

disclaimer.

* * * * *

(c) * * *

(3) Transfer. (i) * * * With respect to

transfers made by a decedent at death or

transfers that become irrevocable at

death, the transfer creating the interest

occurs on the date of the decedent’s

death, even if an estate tax is not

imposed on the transfer. For example, a

bequest of foreign-situs property by a

nonresident alien decedent is regarded

as a transfer creating an interest in

property even if the transfer would not

be subject to estate tax. If there is a

transfer creating an interest in property

during the transferor’s lifetime and such

interest is later included in the

transferor’s gross estate for estate tax

purposes (or would have been included

if such interest were subject to estate

tax), the 9-month period for making the

qualified disclaimer is determined with

reference to the earlier transfer creating

the interest. In the case of a general
68186 Federal Register / Vol. 62, No. 250 / Wednesday, December 31, 1997 / Rules and Regulations

power of appointment, the holder of the

power has a 9-month period after the

transfer creating the power in which to

disclaim. If a person to whom any

interest in property passes by reason of

the exercise, release, or lapse of a

general power desires to make a

qualified disclaimer, the disclaimer

must be made within a 9-month period

after the exercise, release, or lapse

regardless of whether the exercise,

release, or lapse is subject to estate or

gift tax. * * *

(ii) Sentences 1 through 10 and 12 of

paragraph (c)(3)(i) of this section are

applicable for transfers creating the

interest to be disclaimed made on or

after December 31, 1997.

(4) Joint property—(i) Interests in joint

tenancy with right of survivorship or

tenancies by the entirety. Except as

provided in paragraph (c)(4)(iii) of this

section (with respect to joint bank,

brokerage, and other investment

accounts), in the case of an interest in

a joint tenancy with right of

survivorship or a tenancy by the

entirety, a qualified disclaimer of the

interest to which the disclaimant

succeeds upon creation of the tenancy

must be made no later than 9 months

after the creation of the tenancy

regardless of whether such interest can

be unilaterally severed under local law.

A qualified disclaimer of the

survivorship interest to which the

survivor succeeds by operation of law

upon the death of the first joint tenant

to die must be made no later than 9

months after the death of the first joint

tenant to die regardless of whether such

interest can be unilaterally severed

under local law and, except as provided

in paragraph (c)(4)(ii) of this section

(with respect to certain tenancies

created on or after July 14, 1988), such

interest is deemed to be a one-half

interest in the property. (See, however,

section 2518(b)(2)(B) for a special rule

in the case of disclaimers by persons

under age 21.) This is the case

regardless of the portion of the property

attributable to consideration furnished

by the disclaimant and regardless of the

portion of the property that is included

in the decedent’s gross estate under

section 2040 and regardless of whether

the interest can be unilaterally severed

under local law. See paragraph (c)(5),

Examples (7) and (8), of this section.

(ii) Certain tenancies in real property

between spouses created on or after July

14, 1988. In the case of a joint tenancy

between spouses or a tenancy by the

entirety in real property created on or

after July 14, 1988, to which section

2523(i)(3) applies (relating to the

creation of a tenancy where the spouse

of the donor is not a United States

citizen), the surviving spouse may

disclaim any portion of the joint interest

that is includible in the decedent’s gross

estate under section 2040. See

paragraph (c)(5), Example (9), of this

section.

(iii) Special rule for joint bank,

brokerage, and other investment

accounts (e.g., accounts held at mutual

funds) established between spouses or

between persons other than husband

and wife. In the case of a transfer to a

joint bank, brokerage, or other

investment account (e.g., an account

held at a mutual fund), if a transferor

may unilaterally regain the transferor’s

own contributions to the account

without the consent of the other

cotenant, such that the transfer is not a

completed gift under § 25.2511–1(h)(4),

the transfer creating the survivor’s

interest in the decedent’s share of the

account occurs on the death of the

deceased cotenant. Accordingly, if a

surviving joint tenant desires to make a

qualified disclaimer with respect to

funds contributed by a deceased

cotenant, the disclaimer must be made

within 9 months of the cotenant’s death.

The surviving joint tenant may not

disclaim any portion of the joint

account attributable to consideration

furnished by that surviving joint tenant.

See paragraph (c)(5), Examples (12),

(13), and (14), of this section, regarding

the treatment of disclaimed interests

under sections 2518, 2033 and 2040.

(iv) Effective date. This paragraph

(c)(4) is applicable for disclaimers made

on or after December 31, 1997.

(5) Examples. * * *

* * * * *

Example (7). On February 1, 1990, A

purchased real property with A’s funds. Title

to the property was conveyed to ‘‘A and B,

as joint tenants with right of survivorship.’’

Under applicable state law, the joint interest

is unilaterally severable by either tenant. B

dies on May 1, 1998, and is survived by A.

On January 1, 1999, A disclaims the one-half

survivorship interest in the property to

which A succeeds as a result of B’s death.

Assuming that the other requirements of

section 2518(b) are satisfied, A has made a

qualified disclaimer of the one-half

survivorship interest (but not the interest

retained by A upon the creation of the

tenancy, which may not be disclaimed by A).

The result is the same whether or not A and

B are married and regardless of the

proportion of consideration furnished by A

and B in purchasing the property.

Example (8). Assume the same facts as in

Example (7) except that A and B are married

and title to the property was conveyed to ‘‘A

and B, as tenants by the entirety.’’ Under

applicable state law, the tenancy cannot be

unilaterally severed by either tenant.

Assuming that the other requirements of

section 2518(b) are satisfied, A has made a

qualified disclaimer of the one-half

survivorship interest (but not the interest

retained by A upon the creation of the

tenancy, which may not be disclaimed by A).

The result is the same regardless of the

proportion of consideration furnished by A

and B in purchasing the property.

Example (9). On March 1, 1989, H and W

purchase a tract of vacant land which is

conveyed to them as tenants by the entirety.

The entire consideration is paid by H. W is

not a United States citizen. H dies on June

1, 1998. W can disclaim the entire joint

interest because this is the interest includible

in H’s gross estate under section 2040(a).

Assuming that W’s disclaimer is received by

the executor of H’s estate no later than 9

months after June 1, 1998, and the other

requirements of section 2518(b) are satisfied,

W’s disclaimer of the property would be a

qualified disclaimer. The result would be the

same if the property was held in joint

tenancy with right of survivorship that was

unilaterally severable under local law.

Example (10). In 1986, spouses A and B

purchased a personal residence taking title as

tenants by the entirety. B dies on July 10,

1998. A wishes to disclaim the one-half

undivided interest to which A would

succeed by right of survivorship. If A makes

the disclaimer, the property interest would

pass under B’s will to their child C. C, an

adult, and A resided in the residence at B’s

death and will continue to reside there in the

future. A continues to own a one-half

undivided interest in the property. Assuming

that the other requirements of section 2518(b)

are satisfied, A may make a qualified

disclaimer with respect to the one-half

undivided survivorship interest in the

residence if A delivers the written disclaimer

to the personal representative of B’s estate by

April 10, 1999, since A is not deemed to have

accepted the interest or any of its benefits

prior to that time and A’s occupancy of the

residence after B’s death is consistent with

A’s retained undivided ownership interest.

The result would be the same if the property

was held in joint tenancy with right of

survivorship that was unilaterally severable

under local law.

Example (11). H and W, husband and wife,

reside in state X, a community property state.

* * *

Example (12). On July 1, 1990, A opens a

bank account that is held jointly with B, A’s

spouse, and transfers $50,000 of A’s money

to the account. A and B are United States

citizens. A can regain the entire account

without B’s consent, such that the transfer is

not a completed gift under § 25.2511–1(h)(4).

A dies on August 15, 1998, and B disclaims

the entire amount in the bank account on

October 15, 1998. Assuming that the

remaining requirements of section 2518(b)

are satisfied, B made a qualified disclaimer

under section 2518(a) because the disclaimer

was made within 9 months after A’s death at

which time B had succeeded to full

dominion and control over the account.

Under state law, B is treated as predeceasing

A with respect to the disclaimed interest. The

disclaimed account balance passes through

A’s probate estate and is no longer joint

property includible in A’s gross estate under

section 2040. The entire account is, instead,

includible in A’s gross estate under section
Federal Register / Vol. 62, No. 250 / Wednesday, December 31, 1997 / Rules and Regulations 68187

2033. The result would be the same if A and

B were not married.

Example (13). The facts are the same as

Example (12), except that B, rather than A,

dies on August 15, 1998. A may not make a

qualified disclaimer with respect to any of

the funds in the bank account, because A

furnished the funds for the entire account

and A did not relinquish dominion and

control over the funds.

Example (14). The facts are the same as

Example (12), except that B disclaims 40

percent of the funds in the account. Since,

under state law, B is treated as predeceasing

A with respect to the disclaimed interest, the

40 percent portion of the account balance

that was disclaimed passes as part of A’s

probate estate, and is no longer characterized

as joint property. This 40 percent portion of

the account balance is, therefore, includible

in A’s gross estate under section 2033. The

remaining 60 percent of the account balance

that was not disclaimed retains its character

as joint property and, therefore, is includible

in A’s gross estate as provided in section

2040(b). Therefore, 30 percent (1⁄2×60

percent) of the account balance is includible

in A’s gross estate under section 2040(b), and

a total of 70 percent of the aggregate account

balance is includible in A’s gross estate. If A

and B were not married, then the 40 percent

portion of the account subject to the

disclaimer would be includible in A’s gross

estate as provided in section 2033 and the 60

percent portion of the account not subject to

the disclaimer would be includible in A’s

gross estate as provided in section 2040(a),

because A furnished all of the funds with

respect to the account.

* * * * *

Michael P. Dolan,

Deputy Commissioner of Internal Revenue.

Approved: December 10, 1997.

Donald C. Lubick,

Acting Assistant Secretary of the Treasury.

[FR Doc. 97–33394 Filed 12–30–97; 8:45 am]

BILLING CODE 4830–01–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[WA 29–1–6724, WA 57–7132; FRL–5934–

8]

Approval and Promulgation of State

Implementation Plans: Washington;

Correcting Amendments

AGENCY: Environmental Protection

Agency.

ACTION: Final rule; correcting

amendments.

SUMMARY: This action corrects the

incorporation by reference found in the

approval of the Washington State

Implementation Plan (SIP) revision

published on September 22, 1997 and

corrects a typographical error found in

the Washington SIP Table of Contents

published on June 29, 1995.

DATES: This action is effective on

December 31, 1997.

ADDRESSES: Copies of the State’s request

and other information supporting this

proposed action are available for

inspection during normal business

hours at the following locations: EPA,

Office of Air Quality (OAQ–107), 1200

Sixth Avenue, Seattle, Washington

98101, and the State of Washington

Department of Ecology, 300 Desmond

Drive, Lacey, WA 98503.

Documents which are incorporated by

reference are available for public

inspection at the Air and Radiation

Docket and Information Center, EPA,

401 M Street, SW, Washington, D.C.

20460, as well as the above addresses.

FOR FURTHER INFORMATION CONTACT:

Christine Lemme ́, Office of Air Quality

(OAQ–107), EPA, Seattle, Washington,

(206) 553–0977.

SUPPLEMENTARY INFORMATION: (1) On

September 22, 1997 (62 FR 49442), four

revisions to the Washington SIP were

approved. These revisions addressed the

attainment of the National Ambient Air

Quality Standard (NAAQS) for carbon

monoxide in the Spokane, Washington

urbanized area. The Spokane County

Air Pollution Control Authority Motor

Fuel Specifications for Oxygenated

Gasoline were inadvertently omitted

from the incorporation by reference

section of the Part 52 amendment. This

action corrects that omission by

incorporating these regulations into the

Washington SIP.

(2) On June 29, 1995 (60 FR 33736),

EPA approved the recodification of the

SIP table of contents submitted by the

Washington Department of Ecology. A

typographical error occurred in the

bracketed portion of Section 2.2.415,

WAC 173–415–030, and one of the

‘‘exceptions’’ was mistakenly omitted. It

should now read, ‘‘Emission Standards

[except section (1) and (3)(b)]’’. (Section

(1) had been mistakenly omitted).

Under Executive Order 12866 (58 FR

51735, October 4, 1993), this action is

not a ‘‘significant regulatory action’’,

and is, therefore, not subject to review

by the Office of Management and

Budget. In addition, this action does not

impose any enforceable duty or contain

any unfunded mandate as described in

the Unfunded Mandates Reform Act of

1995 (P.L. 104–4), or require prior

consultation with State officials as

specified by Executive Order 12875 (58

FR 58093, October 28, 1993), or involve

special consideration of environmental

justice related issues as required by

Executive Order 12898 (59 FR 7629,

February 16, 1994).

Because this action is not subject to

notice-and-comment requirements

under the Administrative Procedure Act

or any other statute, it is not subject to

the provisions of the Regulatory

Flexibility Act (5 U.S.C. 601 et seq.).

Under 5 U.S.C. 801(a)(1)(A) as added

by the Small Business Regulatory

Enforcement Fairness Act of 1996, EPA

submitted a report containing this rule

and other required information to the

U.S. Senate, the U.S. House of

Representatives and the Comptroller

General of the General Accounting

Office prior to publication of this rule in

today’s Federal Register. This rule is

not a ‘‘major rule’’ as defined by 5

U.S.C. 804(2).

List of Subjects in 40 CFR Part 52

Environmental protection, Air

pollution control, Carbon monoxide,

Incorporation by reference,

Intergovernmental relations, Reporting

and recordkeeping requirements.

Dated: December 3, 1997.

Chuck Findley,

Acting Regional Administrator, Region X.

40 CFR part 52 is amended as follows:

PART 52—[AMENDED]

1. The authority citation for Part 52

continues to read as follows:

Authority: 42 U.S.C. 7401 et seq.

Subpart WW—Washington

2. Section 52.2470 is amended by

revising paragraph (c)(75) to read as

follows:

§ 52.2470 Identification of plan.

* * * * *

(c) * * *

(75) On January 22, 1993, September

14, 1993, and April 30, 1996, the

Director of the Washington Department

of Ecology submitted to the Regional

Administrator of EPA four revisions to

the SIP consisting of amendments to the

Spokane CO SIP.

(i) Incorporation by reference.

(A) Letter dated January 22, 1993,

from Washington to EPA requesting

approval of revisions to the Spokane CO

portion of the Washington State

Implementation Plan; the ‘‘Supplement

to the State Implementation Plan for

Washington State, Spokane Carbon

Monoxide Nonattainment Area,’’ dated

January 1993, Sections 6.0, 6.1, 6.3, and

6.4.

(B) Letter dated September 14, 1993,

from Washington to EPA providing

supplementary information to that

submitted on January 22, 1993;

‘‘Spokane County Carbon Monoxide

Non-attainment Area 1990 Base Year