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administration while ensuring that transfers having a
similar substantial effect will be subject to tax in a
similar manner. [Emphasis added.]
To paraphrase, the Committee expressed its intention that (1)
Federal transfer taxes generally should be applied as uniformly
as possible, and (2) generation-skipping transfers having a
similar substantial effect should be taxed in a similar manner.
In Peterson Marital Trust v. Commissioner, 98 F.3d at 800,
the Second Circuit concluded the regulation in dispute therein
was a reasonable interpretation of TRA 1986 section 1433(b)(2)(A)
because the regulation ensured that general powers of appointment
would be treated consistently; i.e., treated as outright
ownership of the property for purposes of all Federal transfer
taxes, which harmonized with the origin and purpose of the
statute.
Section 26.2601-1(b)(1)(i), GST Tax Regs., harmonizes with
the origin and purpose of TRA 1986 section 1433(b)(2)(A) and
achieves the consistency and uniformity Congress sought. By
excluding transfers arising from the exercise of a general power
of appointment from the transitional relief provided in TRA 1986
section 1433(b)(2)(A) for “transfers under a trust”, the
regulation ensures that general powers of appointment are
uniformly treated as the equivalent of outright ownership by the
power holder. In other words, the regulation is consistent with
the general proposition under the GST tax regime that a decedent
who dies holding a general power of appointment over property is
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