Estate of Eleanor R. Gerson, Deceased, Allan D. Kleinman, Executor - Page 20

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          the transfer in dispute from GST tax, inasmuch as decedent’s                
          exercise of her general power of appointment under the Benjamin             
          Gerson Trust in favor of her grandchildren constituted a                    
          “generation-skipping transfer under a trust that was irrevocable            
          on September 25, 1985”.  Petitioner maintains section 26.2601-              
          1(b)(1)(i), GST Tax Regs., is an invalid attempt by the Secretary           
          to “re-write the statute and to override the judicial                       
          construction of the statute’s plain language”.6  As petitioner              
          sees it, TRA 1986 section 1433(b)(2)(A) was intended to protect             
          the reliance interest of a grantor of a trust that was                      
          irrevocable on September 25, 1985--that is, Congress intended               
          such grantors could be assured any transfer from an irrevocable             
          trust would not be subjected to GST tax.                                    
              Respondent maintains section 26.2601-1(b)(1)(i), GST Tax               
          Regs., is a reasonable and valid interpretation of TRA 1986                 
          section 1433(b)(2)(A).  Respondent avers TRA 1986 section                   
          1433(b)(2)(A) is silent regarding the proper treatment of                   
          transfers from irrevocable trusts pursuant to the exercise of a             
          general power of appointment, and section 26.2601-1(b)(1)(i), GST           
          Tax Regs., reasonably fills the statutory gap.  Relying on the              
          Second Circuit opinion in Peterson Marital Trust for the general            


               6  In connection with this point, petitioner contends TRA              
          1986 sec. 1433(b)(2)(A) was carefully drafted to except from the            
          GST tax any transfer under a trust that was irrevocable on Sept.            
          25, 1985, with one narrow exclusion for transfers made out of               
          corpus added to the trust after Sept. 25, 1985.                             




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