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decedent's power of appointment was general, (2) the power was in
fact exercised, and (3) the appointive property passed as a
result of the decedent's exercise of the power. Estate of Kurz
v. Commissioner, 101 T.C. at 51. The 1942 Act included a short
transition period to allow for the release of existing powers,
but due to widespread dissatisfaction, Congress granted numerous
extensions to the effective date of the amendment. S. Rept. 382,
supra.
The Powers of Appointment Act of 1951 effectively restored
the law as it had existed prior to the 1942 Act for those powers
of appointment created prior to the 1942 Act. For powers created
after that date, the 1951 Act maintained the general scheme of
taxing powers, whether exercised or not, but added the lapsed
powers provisions now codified as section 2041(b)(2), then
section 811(f)(5). The Senate Report commented:
Since the problem of the termination or lapse of powers
of appointment during life arises primarily in the case
of dispositions of moderate-sized properties where the
donor is afraid the income will be insufficient for the
income beneficiary and therefore gives the income
beneficiary a noncumulative invasion power, it is
believed that the exemption provided in the committee
amendment ($5,000 or 5 percent of the principal) will
be adequate to cover the usual cases without being
subject to possible abuses.
The purpose of the new section 811(f)(5), added by
this committee amendment, is to provide a
determination, as of the date of the lapse of the
power, of the proportion of the property over which the
power lapsed which is not to be considered as a taxable
disposition for estate tax purposes and the proportion
thereof which, if other requirements of section 811 are
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