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OPINION
FOLEY, Judge: By notice dated March 15, 2000, respondent
determined an $830,720 Federal estate tax deficiency. The issue
for determination is whether, for valuation purposes, stock owned
outright by Aldo H. Fontana must be aggregated with stock over
which he possessed a general power of appointment (GPA),
exercisable only in his will (testamentary GPA).
Background
Aldo and Doris F. Fontana, husband and wife, had two
children, Richard A. Fontana and Joan F. Rebotarro. Prior to
Doris’s death on April 18, 1993, Aldo and Doris owned, as
community property, all of the outstanding voting and nonvoting
common shares of Fontana Ledyard Co., Inc. (Ledyard). Pursuant
to Doris’s will, the residue of her estate was divided into two
trusts, Trust A and Trust B. Aldo was trustee of both trusts.
Trust A and Trust B held 2,834 and 381 voting, and 18,090 and
2,435 nonvoting, shares of Ledyard, respectively. During his
lifetime, Aldo received, from both trusts, all income and such
principal as was necessary for his proper support, care,
maintenance, and education. During his lifetime, Aldo had no
power to control distribution of the trusts’ assets, other than
as a fiduciary. Aldo had a testamentary GPA over the assets held
by Trust A, and as a result Doris’s estate received a marital
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Last modified: May 25, 2011