
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC2041]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                    Subtitle B--Estate and Gift Taxes
 
                         CHAPTER 11--ESTATE TAX
 
             Subchapter A--Estates of Citizens or Residents
 
                         PART III--GROSS ESTATE
 
Sec. 2041. Powers of appointment


(a) In general

    The value of the gross estate shall include the value of all 
property.

     (1) Powers of appointment created on or before October 21, 
                                    1942

        To the extent of any property with respect to which a general 
    power of appointment created on or before October 21, 1942, is 
    exercised by the decedent--
            (A) by will, or
            (B) by a disposition which is of such nature that if it were 
        a transfer of property owned by the decedent, such property 
        would be includible in the decedent's gross estate under 
        sections 2035 to 2038, inclusive;

    but the failure to exercise such a power or the complete release of 
    such a power shall not be deemed an exercise thereof. If a general 
    power of appointment created on or before October 21, 1942, has been 
    partially released so that it is no longer a general power of 
    appointment, the exercise of such power shall not be deemed to be 
    the exercise of a general power of appointment if--
                (i) such partial release occurred before November 1, 
            1951, or
                (ii) the donee of such power was under a legal 
            disability to release such power on October 21, 1942, and 
            such partial release occurred not later than 6 months after 
            the termination of such legal disability.

              (2) Powers created after October 21, 1942

        To the extent of any property with respect to which the decedent 
    has at the time of his death a general power of appointment created 
    after October 21, 1942, or with respect to which the decedent has at 
    any time exercised or released such a power of appointment by a 
    disposition which is of such nature that if it were a transfer of 
    property owned by the decedent, such property would be includible in 
    the decedent's gross estate under sections 2035 to 2038, inclusive. 
    For purposes of this paragraph (2), the power of appointment shall 
    be considered to exist on the date of the decedent's death even 
    though the exercise of the power is subject to a precedent giving of 
    notice or even though the exercise of the power takes effect only on 
    the expiration of a stated period after its exercise, whether or not 
    on or before the date of the decedent's death notice has been given 
    or the power has been exercised.

           (3) Creation of another power in certain cases

        To the extent of any property with respect to which the 
    decedent--
            (A) by will, or
            (B) by a disposition which is of such nature that if it were 
        a transfer of property owned by the decedent such property would 
        be includible in the decedent's gross estate under section 2035, 
        2036, or 2037,

    exercises a power of appointment created after October 21, 1942, by 
    creating another power of appointment which under the applicable 
    local law can be validly exercised so as to postpone the vesting of 
    any estate or interest in such property, or suspend the absolute 
    ownership or power of alienation of such property, for a period 
    ascertainable without regard to the date of the creation of the 
    first power.

(b) Definitions

    For purposes of subsection (a)--

                  (1) General power of appointment

        The term ``general power of appointment'' means a power which is 
    exercisable in favor of the decedent, his estate, his creditors, or 
    the creditors of his estate; except that--
            (A) A power to consume, invade, or appropriate property for 
        the benefit of the decedent which is limited by an ascertainable 
        standard relating to the health, education, support, or 
        maintenance of the decedent shall not be deemed a general power 
        of appointment.
            (B) A power of appointment created on or before October 21, 
        1942, which is exercisable by the decedent only in conjunction 
        with another person shall not be deemed a general power of 
        appointment.
            (C) In the case of a power of appointment created after 
        October 21, 1942, which is exercisable by the decedent only in 
        conjunction with another person--
                (i) If the power is not exercisable by the decedent 
            except in conjunction with the creator of the power--such 
            power shall not be deemed a general power of appointment.
                (ii) If the power is not exercisable by the decedent 
            except in conjunction with a person having a substantial 
            interest in the property, subject to the power, which is 
            adverse to exercise of the power in favor of the decedent--
            such power shall not be deemed a general power of 
            appointment. For the purposes of this clause a person who, 
            after the death of the decedent, may be possessed of a power 
            of appointment (with respect to the property subject to the 
            decedent's power) which he may exercise in his own favor 
            shall be deemed as having an interest in the property and 
            such interest shall be deemed adverse to such exercise of 
            the decedent's power.
                (iii) If (after the application of clauses (i) and (ii)) 
            the power is a general power of appointment and is 
            exercisable in favor of such other person--such power shall 
            be deemed a general power of appointment only in respect of 
            a fractional part of the property subject to such power, 
            such part to be determined by dividing the value of such 
            property by the number of such persons (including the 
            decedent) in favor of whom such power is exercisable.

        For purposes of clauses (ii) and (iii), a power shall be deemed 
        to be exercisable in favor of a person if it is exercisable in 
        favor of such person, his estate, his creditors, or the 
        creditors of his estate.

                         (2) Lapse of power

        The lapse of a power of appointment created after October 21, 
    1942, during the life of the individual possessing the power shall 
    be considered a release of such power. The preceding sentence shall 
    apply with respect to the lapse of powers during any calendar year 
    only to the extent that the property, which could have been 
    appointed by exercise of such lapsed powers, exceeded in value, at 
    the time of such lapse, the greater of the following amounts:
            (A) $5,000, or
            (B) 5 percent of the aggregate value, at the time of such 
        lapse, of the assets out of which, or the proceeds of which, the 
        exercise of the lapsed powers could have been satisfied.

                    (3) Date of creation of power

        For purposes of this section, a power of appointment created by 
    a will executed on or before October 21, 1942, shall be considered a 
    power created on or before such date if the person executing such 
    will dies before July 1, 1949, without having republished such will, 
    by codicil or otherwise, after October 21, 1942.

(Aug. 16, 1954, ch. 736, 68A Stat. 385; Pub. L. 87-834, 
Sec. 18(a)(2)(H), Oct. 16, 1962, 76 Stat. 1052; Pub. L. 94-455, title 
XX, Sec. 2009(b)(4)(A), Oct. 4, 1976, 90 Stat. 1894.)


                               Amendments

    1976--Subsec. (a)(2). Pub. L. 94-455 struck out provision that a 
disclaimer or renunciation of a power of appointment not be deemed a 
release of that power.
    1962--Subsec. (a). Pub. L. 87-834 struck out provisions which 
excepted real property situated outside of the United States.


                    Effective Date of 1976 Amendment

    Amendment by Pub. L. 94-455 applicable to transfers creating an 
interest in person disclaiming made after Dec. 31, 1976, see section 
2009(e)(2) of Pub. L. 94-455, set out as a note under section 2518 of 
this title.


                    Effective Date of 1962 Amendment

    Amendment by Pub. L. 87-834 applicable to estates of decedents dying 
after Oct. 16, 1962, except as otherwise provided, see section 18(b) of 
Pub. L. 87-834, set out as a note under section 2031 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 2013, 2037, 2043, 2045, 
2055, 2106, 2207, 6324 of this title.
