- 41 -
Although respondent did not refer to section 2041(a)(2) in
the notices of deficiency, pleadings, or trial memoranda, or at
trial, we disagree that respondent has raised a new issue.
Regardless of which Code section respondent relies upon to
include the values of the property in decedent’s gross estate,
the issue before us remains whether the values of the assets
decedent allegedly transferred before her death are includable in
her gross estate. Both section 2033 and section 2041(a)(2)
operate to include property in a decedent’s gross estate. The
sections differ in that they apply to, and operate on, different
property interests of a decedent. Our conclusion as to which
section applies will depend upon, and flow from, our conclusion
regarding the types of property interests decedent held on the
date of her death.
Even if we were to conclude that respondent’s reliance on
section 2041(a)(2) is a new issue, however, we would still allow
respondent to rely on that Code section. Because the Sidney Gore
Trust declaration allegedly granted decedent a general power of
appointment over the Marital Fund assets, respondent’s current
reliance on both sections 2033 and 2041(a)(2) should not cause
surprise or prejudice to petitioner.40 Moreover, petitioner is
40Although respondent argues on brief that the Sidney Gore
Trust did not grant decedent a general power of appointment over
Marital Fund assets within the meaning of sec. 2041(a), it
appears that decedent did have such a power. See, e.g., Estate
(continued...)
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