Par. 2. In § 1.72-6, paragraph (e) is added to read as follows:
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(e) Certain annuity contracts received in exchange for property —(1) In general. If an annuity contract is received in an exchange subject to § 1.1001-1(j), the aggregate amount of premiums or other consideration paid for the contract equals the amount realized attributable to the annuity contract, determined according to § 1.1001-1(j).
(2) Effective date —(i) In general. Except as provided in paragraph (e)(2)(ii), this paragraph (e) is applicable for annuity contracts received after October 18, 2006 in an exchange subject to § 1.1001-1(j).
(ii) This paragraph (e) is applicable for annuity contracts received after April 18, 2007 in an exchange subject to § 1.1001-1(j) if the following conditions are met—
(A) The issuer of the annuity contract is an individual;
(B) The obligations under the annuity contract are not secured, either directly or indirectly; and
(C) The property transferred in exchange for the annuity contract is not subsequently sold or otherwise disposed of by the transferee during the two-year period beginning on the date of the exchange. For purposes of this provision, a disposition includes without limitation a transfer to a trust (whether a grantor trust, a revocable trust, or any other trust) or to any other entity even if solely owned by the transferor.