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intended to protect. Mr. Gerson did not structure his
irrevocable trust in a manner that tied the hands of his heirs,
nor was decedent required to make the disputed generation-
skipping transfers. To the contrary, Mr. Gerson gave the
decedent the flexibility to transfer trust property to anyone of
her choosing. Decedent, who was aware or should have been aware
of the regulation in dispute, nevertheless exercised her general
power of appointment to effect a generation-skipping transfer.
Considering all the factors discussed above, we hold section
26.2601-1(b)(1)(i), GST Tax Regs., is a reasonable and valid
interpretation of the plain language of TRA 1986 section
1433(b)(2)(A). The regulation harmonizes with the plain language
of the statute, its origin, and its purpose. Natl. Muffler
Dealers Association v. United States, 440 U.S. at 477.
Accordingly, we sustain respondent’s determination that
decedent’s transfer to her grandchildren was subject to GST tax.
To reflect the foregoing,
Decision will be
entered for respondent.
Reviewed by the Court.
COHEN, SWIFT, HALPERN, THORNTON, GOEKE, and KROUPA,
JJ., agree with this majority opinion.
CHIECHI, J., concurs in result only.
FOLEY, J., did not participate in the consideration of this
opinion.
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