Estate of Ralph H. Davis, Deceased, Evelyn Davis, Personal Representative - Page 10




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          $220,593 and issued a statutory notice of deficiency to the                 
          estate.                                                                     
               On October 1, 2001, Evelyn L. Davis filed a “NOTICE OF                 
          IRREVOCABLE EXERCISE OF GENERAL POWER OF APPOINTMENT”, which                
          provides:                                                                   
                    I, EVELYN DAVIS, the holder of the power to distribute            
               income under the RALPH H. DAVIS DECLARATION OF TRUST DATED             
               FEBRUARY 24, 1993 as amended April 9, 1996, pursuant to                
               Paragraph 2 of said Amendment, do hereby irrevocably                   
               exercise my right to receive all of the income from this               
               trust for the balance of my life.                                      
                    I do hereby exercise this instruction irrevocably, and            
               hereby order that all of the income [be] paid to me quarter-           
               annually or more frequently if necessary.                              
                    This exercise is effective as of the date of death of             
               my husband, RALPH H. DAVIS, pursuant to his instructions and           
               intent as expressed to me.                                             
                                     Discussion                                       
               Section 2001 imposes a tax on the transfer of the taxable              
          estate of all persons who are citizens or residents of the United           
          States at the time of death.  The amount of the tax depends on              
          the size of the taxable estate, sec. 2001(b), which is equal to             
          the value of the gross estate less deductions.  Sec. 2051; see              
          Estate of Armstrong v. Commissioner, 119 T.C. 220 (2002).                   
          Section 2056(a) allows a marital deduction from a decedent’s                
          gross estate for the value of the property interests passing from           
          the decedent to a decedent’s surviving spouse.  Estate of Clack             
          v. Commissioner, 106 T.C. 131, 137 (1996).                                  







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