-42-
power”. United States v. Byrum, 408 U.S. 125, 136 (1972).
Nonetheless, regulations clarify:
With respect to such a power, it is immaterial
(i) whether the power was exercisable alone or only in
conjunction with another person or persons, whether or
not having an adverse interest; (ii) in what capacity
the power was exercisable by the decedent or by another
person or persons in conjunction with the decedent; and
(iii) whether the exercise of the power was subject to
a contingency beyond the decedent’s control which did
not occur before his death (e.g., the death of another
person during the decedent’s lifetime). The phrase,
however, does not include a power over the transferred
property itself which does not affect the enjoyment of
the income received or earned during the decedent’s
life. * * * Nor does the phrase apply to a power held
solely by a person other than the decedent. But, for
example, if the decedent reserved the unrestricted
power to remove or discharge a trustee at any time and
appoint himself as trustee, the decedent is considered
as having the powers of the trustee. [Sec. 20.2036-
1(b)(3), Estate Tax Regs.]
Additionally, retention of a right to exercise managerial power
over transferred assets or investments does not in and of itself
result in inclusion under section 2036(a)(2). United States v.
Byrum, supra at 132-134.
An exception to the treatment mandated by section 2036(a)
exists where the facts establish “a bona fide sale for an
adequate and full consideration in money or money’s worth”.
Like section 2036, section 2038 provides for inclusion in
the gross estate of the value of transferred property.
Specifically, as pertinent here, section 2038(a)(1) addresses
revocable transfers and requires inclusion of the value of
property:
Page: Previous 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 NextLast modified: May 25, 2011