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alternative that, even if the order of the probate court
does constitute a qualified disclaimer, Mrs. Rapp did not
thereby receive a qualifying income interest for life as
required by section 2056(b)(7)(B)(i)(II).
In general, if a person makes a qualified disclaimer
with respect to an interest in property, then the Federal
estate, gift, and generation-skipping transfer tax
provisions apply "as if the interest had never been
transferred to such person." Sec. 2518(a); see sec.
25.2518-1(b), Gift Tax Regs. The interest is treated as
passing directly from the transferor of the property to
the person entitled to receive it as a result of the
disclaimer. Sec. 25-2518-1(b), Gift Tax Regs. If property
is treated as passing from the decedent to his or her
surviving spouse as a result of a qualified disclaimer,
then the value of the property can be included in the
marital deduction. See DePaoli v. Commissioner, 62 F.3d
1259 (10th Cir. 1995), revg. T.C. Memo. 1993-577; sec.
20.2056(d)-1(b), Estate Tax Regs.
Petitioner raised its contention that the probate
court order constituted a qualified disclaimer under
section 2518 for the first time in its post-trial brief.
In deciding whether to permit a party to raise a new issue
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