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Peterson Marital Trust v. Commissioner, 102 T.C. 790 (1994),
affd. 78 F.3d 795 (2d Cir. 1996). That case is both factually
and legally distinguishable from Simpson v. United States, supra,
and Bachler v. United States, supra. First, as a matter of law,
Peterson Marital Trust did not deal with the part of the statute
at issue in Simpson and Bachler (as well as at issue here). The
case of Peterson Marital Trust concerned the part of TRA 1986
section 1433(b)(2)(A) that follows the comma; i.e., the exception
that provides “only to the extent that such transfer is not made
out of corpus added to the trust after September 25, 1985”. The
Courts of Appeals for the Eighth and Ninth Circuits construed the
part of TRA 1986 section 1433(b)(2)(A) preceding the comma; i.e.,
the general rule that provides “any generation-skipping transfer
under a trust which was irrevocable on September 25, 1985”. The
Courts of Appeals for the Eighth and Ninth Circuits held
specifically that the exercise of a general testamentary power of
appointment by a beneficiary of a decedent’s trust is within the
“clear” or “straightforward” plain reading of the general rule
because the exercise is a transfer under a trust which was
irrevocable on September 25, 1985. Bachler v. United States,
supra at 1079, 1080 (the court reached its decision by applying a
“straightforward reading” of the general rule); Simpson v. United
States, supra at 813, 814, 816 (the court held that the reading
of the general rule is “clear”); accord Bartlik v. U.S. Dept. of
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