note. PUBLIC LAW 107-16-JUNE 7, 2001 115 STAT. 89 then the transferor may make an allocation of any of such transferor's unused GST exemption to any previous transfer or transfers to the trust on a chronological basis. "(2) SPECIAL RULES.—If the allocation under paragraph (1) by the transferor is made on a gift tax return filed on or before the date prescribed by section 6075(b) for gifts made within the calendar year within which the non-skip person's death occurred— "(A) the value of such transfer or transfers for purposes of section 2642(a) shall be determined as if such allocation had been made on a timely filed gift tax return for each calendar year within which each transfer was made, "(B) such allocation shall be effective immediately before such death, and "(C) the amount of the transferor's unused GST exemption available to be allocated shall be determined immediately before such death. "(3) FUTURE INTEREST.— For purposes of this subsection, a person has a future interest in a trust if the trust may permit income or corpus to be paid to such person on a date or dates in the future.". (b) CONFORMING AMENDMENT. —Paragraph (2) of section 2632(b) 26 USC 2632. is amended by striking "with respect to a prior direct skip" and inserting "or subsection (c)(1)". (c) EFFECTIVE DATES.— Applicabmty. (1) DEEMED ALLOCATION. —Section 2632(c) of the Internal 26 USC 2632 Revenue Code of 1986 (as added by subsection (a)), and the amendment made by subsection (b), shall apply to transfers subject to chapter 11 or 12 made after December 31, 2000, and to estate tax inclusion periods ending after December 31, 2000. (2) RETROACTIVE ALLOCATIONS. — Section 2632(d) of the Internal Revenue Code of 1986 (as added by subsection (a)) shall apply to deaths of non-skip persons occurring after December 31, 2000. SEC. 562. SEVERING OF TRUSTS. (a) IN GENERAL. —Subsection (a) of section 2642 (relating to inclusion ratio) is amended by adding at the end the following new paragraph: "(3) SEVERING OF TRUSTS.— "(A) IN GENERAL.— I f a trust is severed in a qualified severance, the trusts resulting from such severance shall be treated as separate trusts thereafter for purposes of this chapter. "(B) QUALIFIED SEVERANCE.—For purposes of subparagraph (A>— "(i) IN GENERAL.— The term 'qualified severance' ' '•'• means the division of a single trust and the creation (by any means available under the governing instrument or under local law) of two or more trusts if— "(I) the single trust was divided on a fractional basis, and "(II) the terms of the new trusts, in the aggregate, provide for the same succession of interests
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