Court Opinion

ID: 8991457
Source: CourtListenerOpinion
Date Created: 2022-11-27 12:14:44.574141+00
Date Added: 2024-06-11T17:10:55.840523
License: Public Domain

BRIGHT, Senior Circuit Judge,
concurring in the result.
I agree that Mrs. Irvine’s disclaimer was not valid for federal gift tax purposes. Very simply put, the 1917 gift from Lucius P. Ordway in trust to his wife and heirs constituted a taxable transfer as that term is defined under the applicable gift tax laws and regulations. See Treas.Reg. § 25.2518-2(c)(3) (1990). “With respect to inter vivos transfers, a taxable transfer occurs when there is a completed gift for Federal gift tax purposes regardless of whether a gift tax is imposed on the completed gift.” Id. Thus, “taxable transfer”, as used in the regulation, merely describes a class of interests to which the regulation applies based upon the nature of the transactions creating them. It is not meant to literally refer solely to transfers in which gift taxes were assessed. Therefore, under Treas.Reg. § 25.2511-l(c)(2) (1990),1 Mrs. Irvine’s remainder interest was subject to the federal gift tax unless her disclaimer, as to the portion here in question, was timely.
Pursuant to Jewett v. Commissioner, 455 U.S. 305, 102 S.Ct. 1082, 71 L.Ed.2d 170 (1982), the time period for Mrs. Irvine to *350disclaim her interest began to run, at the latest, in 1931 when she was aware of her remainder interest and had reached the age of majority. Clearly, Mrs. Irvine’s partial disclaimer, almost fifty years later, was not made within a reasonable time. See Jewett, 455 U.S. at 318, 102 S.Ct. at 1090 (rejecting disclaimer made twenty-four years after reaching age of majority for federal gift tax purposes). Such a late disclaimer will not operate to avoid the application of the federal gift tax laws.

. Treas.Reg. § 25.251 l-l(c)(2) (1990) reads in pertinent part:
In the case of taxable transfers creating an interest in the person disclaiming made before January 1, 1977, where the law governing the administration of the decedent’s estate gives a beneficiary, heir, or next-of-kin a right completely and unqualifiedly to refuse to accept ownership of property transferred from a decedent ..., a refusal to accept ownership does not constitute the making of a gift if the refusal is made within a reasonable time after *350knowledge of the existence of the transfer.... There can be no refusal of ownership of property after its acceptance. In the absence of the facts to the contrary, if a person fails to refuse to accept a transfer to him of ownership of a decedent’s property within a reasonable time after learning of the existence of the transfer, he will be presumed to have accepted the property.
Although this regulation read differently at the time Mrs. Irvine made her disclaimer, absent a contrary indication from the Secretary of the Treasury, tax regulations apply retroactively to the year of the Tax Code they interpret, in this case — 1976. See 26 U.S.C.A. § 7805(b) (West Supp.1991).