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§ 15.2 CONTRIBUTIONS OF REMAINDER INTERESTSIn this context, the charitable remainder interest must be in the residenceitself and not simply in the proceeds to be derived from sale of the residence ata future date. 20 The IRS so held in the setting of a contribution of a remainderinterest in a decedent’s personal residence bequeathed to charity, under a willwhich provided that the property was to be sold upon the life tenant’s deathand the entire proceeds of the sale to be paid to a charitable organization. 21 Acharitable deduction will, however, be allowed for the value of a remainderinterest in a personal residence when the residence is to be sold and the proceedsdistributed to a charitable organization, as long as local law permits the charityto elect distribution of the residence itself. 22 The charitable deduction will beallowed, because a gift of a remainder interest in a personal residence is given tocharity and to an individual as tenants in common, for the value of the interestreceived by the charity. 23 The deduction will also be allowed, notwithstandingthe fact that the applicable law (known as a mortmain act) requires the charitablerecipient to dispose of the property within 10 years of the date of acquisition. 24In the last of these situations, the IRS noted that the “circumstance does not lenditself to abuse” because the charitable organization is receiving the . . . [property]in its original form and can sell the property for itself in the way that is mostadvantageous and most likely to realize the full value of the property.” 25As noted, this type of remainder interest gift cannot be made by means ofa trust. (The nontrust contribution to a charitable organization of a remainderinterest in a personal residence, with retention of an estate in the property forlife or for a term of years, is not considered a transfer in trust. 26 )A court had the opportunity to review this matter in some detail (albeit inthe context of the federal estate tax charitable deduction), and construed theprovision as meaning that the remainder interest, to result in a charitable deduction,cannot pass through a trust. 27 An individual created a trust in his will bywhich a life estate was created in two personal residences for the benefit of hissister, with the remainder interest destined for charitable organizations. Thecourt traced the legislative history of the general rule requiring gifts of thisnature to be in a qualifying trust and the rule creating an exception for nontrustgifts of remainder interests in personal residences. It found that the trust did notconform to the requirements of a charitable remainder trust (in part because ofauthority granted to the trustee). The charitable remainder trust rules were created“to eliminate possible abuses in the administration of trusts which mightoperate to deprive the charity of the future remainder interest” for which therehas been a charitable deduction. 28 The court added that “[t]his concern is no lesspresent with respect to personal residences which first pass through a trust not20 Rev. Rul. 76-543, 1976-2 C.B. 287, amplified by Rev. Rul. 77-169, 1977-1 C.B. 286.21 Rev. Rul. 77-169, 1977-1 C.B. 286.22 Rev. Rul. 83-158, 1983-2 C.B. 159, distinguishing Rev. Rul. 77-169, 1977-1 C.B. 286; Rev. Rul. 76-543,1976-2 C.B. 287. See also Blackford Estate v. Commissioner, 77 T.C. 1246 (1981).23 Rev. Rul. 87-37, 1987-1 C.B. 295.24 Rev. Rul. 84-97, 1984-2 C.B. 196.25 Id. at 197.26 Reg. § 1.170A-7(b)(3).27 Ellis First Nat’l Bank v. United States, 550 F.2d 9 (Ct. Cl. 1977).28 Id. at 16. 507