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interpretation was previously rejected by a judicial tribunal in
favor of the plain reading application of that section.
TRA 1986 section 1433(b)(2)(A) provides in relevant part
that the GST does not apply to “any generation-skipping transfer
under a trust which was irrevocable on September 25, 1985, but
only to the extent that such transfer is not made out of corpus
added to the trust after September 25, 1985”.3 As noted in the
Court’s opinion supra pp. 7 and 17-18, the Secretary proposed
section 26.2601-1(b)(1)(i), GST Tax Regs., in 1999, 13 years
after the enactment of TRA 1986 section 1433(b)(2)(A), to
supplant the literal interpretation that the Secretary had given
TRA 1986 section 1433(b)(2)(A) in a predecessor regulation and,
more particularly, to overrule the judiciary’s rejection in
Simpson v. United States, supra, of respondent’s more restrictive
interpretation of TRA 1986 section 1433(b)(2)(A). As finalized,
2(...continued)
disposition required by the text is not absurd--is to enforce it
according to its terms.” Arlington Cent. Sch. Dist. Bd. of Educ.
v. Murphy, 548 U.S. , 126 S.Ct. 2455, 2459 (2006) (citations
and internal quotation marks omitted).
3 As I read TRA 1986 sec. 1433(b)(2)(A), Congress included
within that section both a general rule and an exception thereto.
The general rule provides that the GST does not apply to “any
generation-skipping transfer under a trust which was irrevocable
on September 25, 1985”. The exception provides that the general
rule applies “only to the extent that such transfer is not made
out of corpus added to the trust after September 25, 1985”.
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