Estate of Henry A. Lassiter, deceased, Paula Ann Masters Lassiter, administrator, C.T.A. - Page 29

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          In other words, section 2056(a) generally allows an unlimited                 
          deduction against estate tax liability for property transferred               
          to a surviving spouse, but section 2056(b)(1) creates an                      
          exception denying the deduction when the spouse’s interest takes              
          a form, such as a life estate in trust, which will terminate in               
          favor of another beneficiary.  Section 2056(b)(7) is among                    
          several exceptions to the exception and allows a deduction for                
          so-called QTIP, qualified terminable interest property.                       
               In the matter before us, the parties do not dispute that an              
          interest in the Item V trust passed to Mrs. Lassiter from                     
          decedent or that a timely QTIP election was made on the estate                
          tax return.  At issue then is whether such interest constitutes a             
          qualified income interest for life.  Furthermore, since the                   
          estate, appropriately, does not contend that the Item V trust as              
          originally set forth in the 1970 will qualifies for the marital               
          deduction, the dispositive issue can be framed more specifically              
          as whether the 1995 disclaimers render the trust eligible for                 
          QTIP treatment.                                                               
               Regulations promulgated under section 2056 contemplate that              
          disclaimed property may be treated as passing to the surviving                
          spouse within the meaning of the statute.  Section 20.2056(d)-                
          2(b), Estate Tax Regs., provides in this regard:                              
               If an interest in property passes from a decedent to a                   
               person other than the surviving spouse, and the                          
               interest is created in a transfer made after December                    
               31, 1976, and--                                                          

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