Chief Counsel Memo. 201208026 (Sept. 28, 2011)

(transfers to irrevocable trust under terms of which trustee had full discretion to administer trust for beneficiaries of charity constituted completed gifts of beneficial term interests because donors’ retained testamentary limited powers of appointment relate only to trust remainder; gift tax incurred on transfer and transfer not incomplete gift covered by Treas. Reg. Sec. 25.2522-2(b); IRS analyzed income and remainder interests separately and concluded that POA impacted only remainder interest and did not impact what beneficiaries would receive during term interest - donors had no retained interest in term interest; gifts not of minority interests equal in value to donors’ respective withdrawal rights (Crummey Powers) which would reduce the taxable gifts to zero because withdrawal rights not legally enforceable; beneficiary could not enforce withdrawal right in state court; no annual exclusion allowable for any of the withdrawal rights).  

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