### Question
How does SPECIAL VALUATION RULES define applicable retained interest?


### Answer
Under *26 U.S.C. § 2701*, **applicable retained interest** is defined as:

> any interest in an entity with respect to which there is—


(A) a distribution right, but only if, immediately before the transfer described in subsection (a)(1), the transferor and applicable family members hold (after application of subsection (e)(3)) control of the entity, or


(B) a liquidation, put, call, or conversion right

#### Citation:
  - *26 U.S.C. § 2701*
  - Heading: **Subtitle B-Estate and Gift Taxes > CHAPTER 14-SPECIAL VALUATION RULES**

