[Code of Federal Regulations]
[Title 26, Volume 14]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR20.2039-1T]

[Page 315-316]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 20_ESTATE TAX; ESTATES OF DECEDENTS DYING AFTER AUGUST 16, 
1954--Table of Contents
 
Sec.  20.2039-1T  Limitations and repeal of estate tax exclusion for 
qualified plans and individual retirement plans (IRAs) (temporary).

    Q-1: Are there any exceptions to the general effective dates of the 
$100,000 limitation and the repeal of the estate tax exclusion for the 
value of interests under qualified plans and IRAs described in section 
2039 (c) and (e)?
    A-1: (a) Yes. Section 245 of the Tax Equity and Fiscal 
Responsibility Act of 1982 (TEFRA) limited the estate tax exclusion to 
$100,000 for estates of decedents dying after December 31, 1982. Section 
525 of the Tax Reform Act of 1984 (TRA of 1984) repealed the exclusion 
for estates of decedents dying after December 31, 1984.
    (b) Section 525(b)(3) of the TRA of 1984 amended section 245 of 
TEFRA to provide that the $100,000 limitation on the exclusion for the 
value of a decedent's interest in a plan or IRA will not apply to the 
estate of any decedent dying after December 31, 1982, to the extent that 
the decedent-participant was in pay status on December 31, 1982, with 
respect to such interest and irrevocably elected the form of benefit 
payable under the plan or IRA (including the form of any survivor 
benefits) with respect to such interest before January 1, 1983.
    (c) Similarly, the TRA of 1984 provides that the repeal of the 
estate tax exclusion for the value of a decedent's interest in a plan or 
IRA will not apply to the estate of a decedent dying after December 31, 
1984, to the extent that the decedent-participant was in pay status on 
December 31, 1984, with respect to such interest and irrevocably elected 
the form of benefit payable under the plan or IRA (including the form of 
any survivor benefits) with respect to such interest before July 18, 
1984.

[[Page 316]]

    Q-2: What is the meaning of ``in pay status'' on the applicable 
date?
    A-2: A participant was in pay status on the applicable date with 
respect to a portion of his or her interest in a plan or IRA if such 
portion is to be paid in a benefit form that has been elected on or 
before such date and the participant has received, on or before such 
date, at least one payment under such benefit form.
    Q-3: What is required for an election of the form of benefit payable 
under the plan to have been irrevocable as of any applicable date?
    A-3: As of any applicable date, an election of the form of benefit 
payable under a plan is irrevocable if, as of such date, it was a 
written irrevocable election that, with respect to all payments to be 
received after such date, specified the form of distribution (e.g., lump 
sum, level dollar annuity, formula annuity) and the period over which 
the distribution would be made (e.g., single life, joint and survivor, 
term certain). An election is not irrevocable as of any applicable date 
if, on or after such date, the form or period of the distribution could 
be determined or altered by any person or persons. An election does not 
fail to be irrevocable as of an applicable date merely because the 
beneficiaries were not designated as of such date or could be changed 
after such date. If any interest in any IRA may not, by law or contract, 
be subject to an irrevocable election described in this section, any 
election of the form of benefit payable under the IRA does not satisfy 
the requirement that an irrevocable election have been made.

[T.D. 8073, 51 FR 4335, Feb. 4, 1986]