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my death I may have a power of appointment or disposal,
I direct my Executor to divide said residuary estate
* * * as follows * * *
It is the interrelationship of the two provisions cited
immediately above that petitioners rely upon in advancing their
argument that there is "no doubt that [Mrs. Ogden] really
distributed the Trust together with her estate."
Petitioners also argue10 that the "special" power of
appointment that Mrs. Ogden possessed with respect to the trust
converted to a "general" power of appointment on the date of Mrs.
Ogden's death.11 The implication drawn from this argument is
that section 2041(a) caused the whole of the trust's corpus to be
included in Mrs. Ogden's gross estate.
Respondent maintains that apart from the 5 percent over
which Mrs. Ogden had a noncumulative right of withdrawal at her
death, Oak Den does not receive a stepped-up basis because it did
not become part of Mrs. Ogden's gross estate. According to
respondent, Oak Den had an adjusted basis of $276,05012 when it
was sold to RFSH. We agree with respondent.
10This argument is partially express and partially implied
by the language used in petitioners' response.
11A "special" power of appointment is a power of appointment
other than a "general" power of appointment. A "general" power
of appointment is textually defined infra.
12Petitioners do not dispute the computation of this figure.
Accordingly, we will not address such computation and will decide
whether Oak Den's adjusted basis on the date it was sold to RFSH
was $276,050 or $600,000.
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Last modified: May 25, 2011