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The basis of property in the hands of a person acquiring
such property from a decedent is generally its fair market value
as of the date of the decedent's death. Sec. 1014(a); Brewster
v. Gage, 280 U.S. 327 (1930). Moreover, section 2041 provides
generally that a decedent's gross estate shall include the value
of all property subject to a "general" power of appointment.
Sec. 2041(a)(2). A "general" power of appointment is a power
which is exercisable in favor of the decedent, the decedent's
estate, the creditors of the decedent, or the creditors of the
decedent's estate.13 Sec. 2041(b)(1). A power of appointment is
not a "general" power of appointment if it is either (1)
exercisable only in favor of one or more designated persons or
classes other than the decedent, the decedent's estate, the
creditors of the decedent, or the creditors of the decedent's
estate, or (2) expressly not exercisable in favor of the
decedent, the decedent's estate, the creditors of the decedent,
or the creditors of the decedent's estate. Sec. 20.2041-1(c)(1),
Estate Tax Regs.
When Oak Den was transferred to the trust pursuant to the
terms of Mr. Ogden's will, it obtained a basis of $259,000.
Apart from Mrs. Ogden's noncumulative power to withdraw 5
percent of the trust's corpus, which resulted in the inclusion of
13Secs. 2041(b)(1)(A), (B), and (C) set forth three
exceptions to this definition, but none applies in the instant
case.
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Last modified: May 25, 2011