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Giving retroactive effect to a statute has been held
appropriate where “the statute does not have the effect of
impairing the obligation of a contract and is not destructive of
vested rights.” Estate of Ridenour v. Commissioner, 36 F.3d 332,
335 (4th Cir. 1994), affg. T.C. Memo. 1993-41. In Estate of
Ridenour, a Virginia statute permitting a gifting power to be
exercised under power of attorney was held to have retroactive
effect for Federal gift tax purposes. The Court of Appeals
reasoned that the Virginia statute merely clarified that a court
may infer a gift power in appropriate circumstances even though
no such power is set forth explicitly in the text of the power of
attorney. The Court of Appeals concluded, as did the Tax Court,
that the statute neither impaired contractual obligations nor
destroyed vested rights which existed prior to the enactment of
the statute. See id. at 335.
However, where a nunc pro tunc modification of a State court
decree provided for retroactive increases in alimony, it was
generally deemed ineffective for Federal income tax purposes.
See Torkoglu v. Commissioner, 36 T.C. 552, 555 (1961); Segal v.
Commissioner, 36 T.C. 148 (1961); Van Vlaanderen v. Commissioner,
10 T.C. 706 (1948), affd. 175 F.2d 389 (3d Cir. 1949); Daine v.
Commissioner, 9 T.C. 47 (1947), affd. 168 F.2d 449, 451-452 (2d
Cir. 1948); Blanchard v. Commissioner, 424 F. Supp. 916 (D. Md.
1976).
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Last modified: May 25, 2011