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(A) the interest or such portion thereof so
passing shall, for purposes of subsection (a), be
considered as passing to the surviving spouse, and
(B) no part of the interest so passing shall, for
purposes of paragraph (1)(A), be considered as passing
to any person other than the surviving spouse.
This paragraph shall apply only if such power in the
surviving spouse to appoint the entire interest, or such
specific portion thereof, whether exercisable by will or
during life, is exercisable by such spouse alone and in all
events.
To fit within the section 2056(b)(5) exception to the
section 2056(b)(1) terminable interest rule, the surviving spouse
must be entitled to all of the income from the testamentary trust
(or from a specific portion thereof) for life and also have a
general power of appointment over the testamentary trust. Sec.
2056(b)(5); see Estate of Walsh v. Commissioner, 110 T.C. 393,
398 (1998); see also Estate of Meeske v. Commissioner, 72 T.C. 73
(1979), affd. sub nom. Estate of Laurin v. Commissioner, 645 F.2d
8 (6th Cir. 1981). In Estate of Meeske v. Commissioner, supra at
78, this Court observed:
By its terms, section 2056(b)(5) provides a fivefold
test for the deductibility of life estates coupled with
powers of appointment: (1) The surviving spouse must be
entitled for life to all the income from the entire interest
or to all the income from a specific portion thereof. (2)
The income must be payable annually or at more frequent
intervals. (3) The surviving spouse must have a power to
appoint the entire interest or such specific portion to
either herself or her estate. (4) The entire interest or
the specific portion must not be subject to a power in any
other person to appoint any part to anyone other than the
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