127 T.C. No. 11
UNITED STATES TAX COURT
ESTATE OF ELEANOR R. GERSON, DECEASED,
ALLAN D. KLEINMAN, EXECUTOR, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 13534-04. Filed October 24, 2006.
G created the Benjamin Gerson Trust which became
irrevocable when G died in 1973. The trust provided
for the creation of a marital trust (the trust) for the
benefit of G’s wife, D. The trust conferred upon D a
general power of appointment over the trust property.
D died in October 2000 and left a will under which she
exercised the power of appointment in favor of her
grandchildren. R determined that the transfer to D’s
grandchildren was subject to generation-skipping
transfer (GST) tax. P contends (1) sec. 26.2601-
1(b)(1)(i), GST Tax Regs., is invalid, and (2) the
transfer is excepted from GST tax under sec.
1433(b)(2)(A) of the Tax Reform Act of 1986, Pub. L.
99-514, 100 Stat. 2731.
Held: Sec. 26.2601-1(b)(1)(i), GST Tax Regs., is
a reasonable and valid interpretation of sec.
1433(b)(2)(A) of the Tax Reform Act of 1986 because it
harmonizes with the plain language of the statute, its
origin, and its purpose.
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