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qualify as qualified terminable interest property under section
2056(b)(7)(B),12 the surviving spouse must be entitled to the
entire income interest for life in the property. Sec.
2056(b)(7)(B)(ii)(I); see Estate of Nicholson v. Commissioner,
supra. The regulations under section 20.2056(b)-5(f), Estate Tax
Regs., apply in determining whether the surviving spouse is
entitled to the entire income interest from the testamentary
trust for purposes of section 2056(b)(7)(B)(ii)(I). Lassiter v.
Commissioner, supra; see sec. 20.2056(b)-7(d)(2), Estate Tax
Regs.13 Having concluded above that the decedent’s surviving
spouse is not entitled to all of the income for life from the
amended trust, we also conclude that in the instant case the
requirements under section 2056(b)(7) have not been satisfied.
12The parties do not dispute that a sec. 2056(b)(7) election
was made.
13Sec. 20.2056(b)-7(d)(2), Estate Tax Regs., provides:
Entitled for life to all income. The principles
of �20.2056(b)-5(f), relating to whether the spouse is
entitled for life to all of the income from the entire
interest, or a specific portion of the entire interest,
apply in determining whether the surviving spouse is
entitled for life to all of the income from the
property regardless of whether the interest passing to
the spouse is in trust.
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