Opinion ID: 734162
Heading Depth: 2
Heading Rank: 1

Heading: Taxation of Estates

Text: 12 Under § 2001 of the I.R.C., the taxable estate, which § 2051 defines as the value of the gross estate less applicable deductions, of every decedent who is a citizen or resident of the United States is subject to a federal estate tax. The value of the gross estate includes the value of all the decedent's property--real or personal, tangible or intangible, wherever situated--at the time of death. I.R.C. §§ 2031, 2033. Sections 2036 and 2038 further delineate the type of property interest properly included in a decedent's gross estate. Under these provisions, the gross estate includes the value of transferred property if the decedent retains any power or control over the transferred property. 3 Section 2036(a) requires that the value of property transferred in trust be included in the settlor's gross estate if, at the time of his death, the settlor retains a discretionary right, either alone or in conjunction with another, to designate the person who will possess or enjoy the property. Estate of Sulovich v. Commissioner, 587 F.2d 845, 847-48 (6th Cir.1978). Section 2038(a)(1) requires inclusion of the value of the property transferred in trust in the settlor's gross estate if, at the time of his death, the settlor retains the discretionary power to terminate the trust. Id. at 848. The settlor's power to terminate the beneficiaries' rights to enjoyment of the trust is a power to alter, amend, revoke or terminate for purposes of I.R.C. § 2038(a)(1). 4