In Focardi v. Commissioner,1 the Tax Court has once again shown a taxpayer the door in the case of a grantor retained annuity trust (GRAT) with a revocable annuity payable to the grantor and the grantor's spouse2 (a two-life annuity). The Tax Court's opinion makes it clear that the taxpayer lost; what's less clear is why. A look at the Tax Court's previous cases on two-life annuities helps to explain the confusion. And a look at the legislative history of Internal
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