Part 5: Carefully review the elements of the terminable interest rule (IRC section 2056(b)(1)); then apply the elements to determine whether the following interests are deductible or nondeductible; assuming in each instance that S is Ds surviving spouse.

a. D sold property to Ds child, C, for $50,000.00, but retained possession for a term of years. The fair market value of the remainder interest transferred to C was $50,000.00. When D died, D still had the right to possession of the property for ten years, which right D left to S.

b. Same as question in part 5(a) above, except, that D made a gift of the remainder interest in the property to C, instead of selling it to C.

c. D, by a will provision, ordered Ds executor to buy a $100,000.00 single-premium life annuity for S.