One can best describe a private annuity by stating what it is not: It is not purchased from a commercial underwriter, but from a person, who, in the ordinary course of his business, does not write annuity contracts. It does not contain a secured promise to perform. In all other respects, the private annuity resembles commercial annuities in that the annuitant transfers cash or other property in exchange for a promise of the transferee (obligor) to make periodic payments of money either for a term of years or for the life of the annuitant. One writer\u27 would fragment such a purchase into two transactions-a sale of property and the purchase of an annuity. However, there seems to be no particular tax advantage in characterizing a private annuity in this manner. While the use of
