PUBLIC LAW 101-508 —NOV. 5, 1990 104 STAT. 1388-497 "(7) TREATMENT AS SEPARATE INTERESTS. —The Secretary may by regulation provide that any applicable retained interest shall be treated as 2 or more separate interests for purposes of this section. "SEC. 2702. SPECIAL VALUATION RULES IN CASE OF TRANSFERS OF IN- TERESTS IN TRUSTS. "(a) VALUATION RULES.— "(1) IN GENERAL. — Solely for purposes of determining whether a transfer of an interest in trust to (or for the benefit of) a member of the transferor's family is a gift (and the value of such transfer), the value of any interest in such trust retained by the transferor or any applicable family member (as defined in section 2701(e)(2)) shall be determined as provided in paragraph (2). " (2) VALUATION OP RETAINED INTERESTS. — "(A) IN GENERAL.—The value of any retained interest which is not a qualified interest shall be treated as being zero. "(B) VALUATION OF QUALIFIED INTEREST. —The value of any retained interest which is a qualified interest shall be determined under section 7520. "(3) EXCEPTIONS. — "(A) IN GENERAL.— Th is subsection shall not apply to any transfer— "(i) to the extent such transfer is an incomplete transfer, or "(ii) if such transfer involves the transfer of an interest in trust all the property in which consists of a residence to be used as a personal residence by persons holding term interests in such trust. "(B) INCOMPLETE TRANSFER. —For purposes of subparagraph (A), the term 'incomplete transfer' means any transfer which would not be treated as a gift whether or not consideration was received for such transfer. "(b) QUALIFIED INTEREST.—For purposes of this section, the term 'qualified interest' means— "(1) any interest which consists of the right to receive fixed amounts payable not less frequently than annually, "(2) any interest which consists of the right to receive amounts which are payable not less frequently than annually and are a fixed percentage of the fair market value of the property in the trust (determined annually), and "(3) any noncontingent remainder interest if all of the other interests in the trust consist of interests described in paragraph (Dor (2). "(c) CERTAIN PROPERTY TREATED AS HELD IN TRUST. —;For purposes of this section— "(1) IN GENERAL.—The transfer of an interest in property with respect to which there is 1 or more term interests shall be treated as a transfer of an interest in a trust. "(2) JOINT PURCHASES.— If 2 or more members of the same family acquire interests in any property described in paragraph (1) in the same transaction (or a series of related transactions), the person (or persons) acquiring the term interests in such property shall be treated as having acquired the entire property and then transferred to the other persons the interests acquired
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