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§ 11.4 NONSTANDARD ACTUARIAL FACTORSThe regulations contain rules concerning the mortality component of thetransferred interest. The IRS previously addressed this issue. One ruling statedthat the value of a life or remainder interest would be determined by taking intoaccount the health of the life tenant if it was known on the valuation date thatthe life tenant was afflicted with a fatal and incurable disease in its advancedstages and that the life tenant could not survive for more than a brief period oftime. 82 Subsequently, the IRS clarified the “brief period” test, stating that thestandard life actuarial factors are to be applied to value the interest unless deathis clearly imminent. 83 The IRS is of the view that this test does not satisfactorilyquantify the probability of death occurring within one year from the valuationdate and that the test may permit the use of standard actuarial factors in inappropriatesituations. These regulations explicitly quantify the applicable standardfor purposes of applying this test.Under the regulations, if an individual who is a measuring life of the interestbeing transferred is known to be terminally ill, the mortality component of thegeneral rules may not be used; a special actuarial factor—rather than a standardactuarial factor—must be used in valuing the interest. 84 Terminal illness is definedas an incurable illness or other deteriorating physical condition when there is atleast a 50 percent probability that the individual will not survive for more thanone year from the valuation date. Exceptions are made for special situations. 85In the instance of the simultaneous death of the transferor and an individualwho is the measuring life of a property interest, the regulations specifically precludeuse of the standard factors in the tables to value that interest.82 Rev. Rul. 66-302, 1966-2 C.B.429.83 Rev. Rul. 80-80, 1980-1 C.B. 194. This revenue ruling, along with Rev. Rul. 66-302, 1966-2 C.B.429, wassuperseded by these regulations addressing nonstandard actuarial factors. Rev. Rul. 96-3, 1996-1 C.B. 348.The efficacy of Rev. Rul. 80-80 during its time was upheld by the U.S. Court of Appeals for the Fifth Circuitin McLendon Estate v. Commissioner, 135 F.3d 1017 (5th Cir. 1998).84 Reg. § 1.7520-3(b)(3).85 Under IRC §§ 2013, 2037, and 2042. 403