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Sixth Circuit, which reversed our decision in Estate of Spencer
v. Commissioner, supra. The Sixth Circuit, however, applied a
rationale somewhat different from that applied by the Fifth
Circuit.
The Tax Court, in those opinions, held that the surviving
spouse did not have a qualifying income interest for life because
the passage of an income interest in the property to the
surviving spouse was contingent upon the executor’s QTIP election
as to such property and was therefore subject to the executor's
power to appoint the property to someone other than the surviving
spouse. Accordingly, the Tax Court concluded that the property
did not meet the requirements of section 2056(b)(7)(B)(ii)(II),
that the surviving spouse did not have a "qualifying income
interest for life", and that the property therefore was not QTIP.
Estate of Robertson v. Commissioner, supra; Estate of Clayton v.
Commissioner, supra; Estate of Spencer v. Commissioner, supra.
In Estate of Clayton v. Commissioner, supra, the taxpayer
argued that, by definition, an interest in property is QTIP only
if the election is made, and that, once the election is made, the
surviving spouse has a qualifying income interest for life,
effective as of the date of the decedent's death. In response,
we stated:
An election, by definition, is necessary to insure
that the property is qualified terminable interest
property. The essence of section 2056(b)(7)(B)(i),
however, is that a terminable interest is deductible
only if it is an interest in property "in which the
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