Ronald J. and Linda Gabriel - Page 14




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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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