§2207 — Liability of recipient of property over which decedent had power of appointment
12 cases·2 distinguished·1 overruled·9 cited
Statute Text — 26 U.S.C. §2207
Unless the decedent directs otherwise in his will, if any part of the gross estate on which the tax has been paid consists of the value of property included in the gross estate under section 2041, the executor shall be entitled to recover from the person receiving such property by reason of the exercise, nonexercise, or release of a power of appointment such portion of the total tax paid as the value of such property bears to the taxable estate. If there is more than one such person, the executor shall be entitled to recover from such persons in the same ratio. In the case of such property received by the surviving spouse of the decedent for which a deduction is allowed under section 2056 (relating to marital deduction), this section shall not apply to such property except as to the value thereof reduced by an amount equal to the excess of the aggregate amount of the marital deductions allowed under section 2056 over the amount of proceeds of insurance upon the life of the decedent receivable by the surviving spouse for which proceeds a marital deduction is allowed under such section.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §20.2207-1 Liability of recipient of property over which decedent had power of appointment
12 Citing Cases
Estate ofWycoffis distinguishable because the executor ofthe estate could choose from which trust to pay the expenses. In this case, however, Clyde Sr.'s will is silent as to the payment oftaxes, and we have found that Clyde Sr. wanted to maximize the marital deduction and that the executor must exercise the right of recovery under sec. 2207B.
Morgens ' estate which is contrary to section 2207A and the legislative intent of the QTIP regime . The estate suggests that because the ultimate responsibility for paying the gift tax on the . section 2519 deemed transfers lies with the trustees of residual trusts A and B, section 2035 (b) does not apply .
§ 2207A (providing rules for the collection of the deferred transfer tax once it is triggered). Again, the focus of these rules is on the transfer of marital assets outside the marital unit. As the Commissioner points out, they say nothing about, and do not apply to, transactions that transferees outside the marital unit, such as Linda and Peter, m
11 See Estate of Morgens, 133 T.C. at 410 (describing the effects of the marital deduction); Estate of Novotny, 93 T.C. at 16–17 (“To the extent it applies, the marital deduction results in property in a marital unit being subject to estate tax once, not twice.”). Of particular relevance here is section 2519, addressing disposit
A tax allocation clause in the trust documents provides that any estate tax due on the transfer to the remainder beneficiaries will be paid out ofthe trust assets before the asset distribution to the beneficiaries.
Because the gift tax will apply to the full value ofthe property even though the donor's term interest may be worth only a small fraction ofthat value, section 2207A(b) allows the donor to recover the gift tax from the donees.
- 24 - to the surviving spouse, the assets attributable to the transferred partnefship interest or the partnership interest itselfare not available to fund the marital bequest; their disposition to the donees occurred during Clyde Sr.'s lifetime but is deemed delayed until Clyde Sr.'s death by our holding that section 2036 applies.
Notwithstanding the foregoing, if any such tax (including any interest or penalties thereon) is imposed on property includible in my gross estate by reason of Section 2044 of the Internal Reve- nue Code, as amended, or corresponding provision of state law, I direct my Personal Representative to recover such tax as provided in Section 2207A of the Internal Revenue Code, as amended, or corresponding provision of state law.
Notwithstanding the foregoing, if any such tax (including any interest or penalties thereon) is imposed on property includible in my gross estate by reason of Section 2044 of the Internal Reve- nue Code, as amended, or corresponding provision of state law, I direct my Personal Representative to recover such tax as provided in Section 2207A of the Internal Revenue Code, as amended, or corresponding provision of state law.
One of these provisions, section 2207B(a), provides as follows: SEC.