mination of the plan if earlier, was a plan described in section 403(a);

(3) a retirement annuity contract purchased for an employee by an employer which is an organization referred to in section 170(b)(1)(A)(ii) or (vi), or which is a religious organization (other than a trust), and which is exempt from tax under section 501(a); or

(4) chapter 73 of title 10 of the United States Code.

If such amounts payable after the death of the decedent under a plan described in paragraph (1) or (2), under a contract described in paragraph (3), or under chapter 73 of title 10 of the United States Code are attributable to any extent to payments or contributions made by the decedent, no exclusion shall be allowed for that part of the value of such amounts in the proportion that the total payments or contributions made by the decedent bears to the total payments or contributions made. For purposes of this subsection, contributions or payments made by the decedent's employer or former employer under a trust or plan described in paragraph (1) or (2) shall not be considered to be contributed by the decedent, and contributions or payments made by the decedent's employer or former employer toward the purchase of an annuity contract described in paragraph (3) shall, to the extent excludable from gross income under section 403(b), not be considered to be contributed by the decedent. This subsection shall apply to all decedents dying after December 31, 1953. For purposes of this subsection, contributions or payments on behalf of the decedent while he was an employee within the meaning of section 401(c)(1) made under a trust or plan described in paragraph (1) or (2) shall, to the extent allowable as a deduction under section 404, be considered to be made by a person other than the decedent and, to the extent not so allowable, shall be considered to be made by the decedent. For purposes of this subsection, amounts payable under chapter 73 of title 10 of the United States Code are attributable to payments or contributions made by the decedent only to the extent of amounts deposited by him pursuant to section 1438 or 1452(d) of such title 10. For purposes of this subsection, any deductible employee contributions (within the meaning of paragraph (5) of section 72(o)) shall be considered as made by a person other than the decedent.

(d) Exemption of certain annuity interests created by community property laws

In the case of an employee on whose behalf contributions or payments were made by his employer or former employer under a trust or plan described in subsection (c)(1) or (2), or toward the purchase of a contract described in subsection (c)(3), which under subsection (c) are not considered as contributed by the employee, if the spouse of such employee predeceases him, then notwithstanding the provisions of this section or of any other provision of law, there shall be excluded from the gross estate of such spouse the value of any interest of such spouse in such trust or plan or such contract, to the extent such interest

(1) is attributable to such contributions or payments, and

(2) arises solely by reason of such spouse's interest in community income under the community property laws of a State.

(e) Exclusion of individual retirement accounts, etc. Subject to the limitation of subsection (g), notwithstanding any other provision of this section or of any other provision of law, there shall be excluded from the value of the gross estate the value of an annuity receivable by any beneficiary (other than the executor) under

(1) an individual retirement account described in section 408(a),

(2) an individual retirement annuity described in section 408(b), or

(3) a retirement bond described in section 409(a).

If any payment to an account described in paragraph (1) or for an annuity described in paragraph (2) or a bond described in paragraph (3) was not allowable as a deduction under section 219 and was not a rollover contribution described in section 402(a)(5), 403(a)(4), section 403(b)(8) (but only to the extent such contribution is attributable to a distribution from a contract described in subsection (c)(3)), 405(d)(3), 408(d)(3), or 409(b)(3)(C), the preceding sentence shall not apply to that portion of the value of the amount receivable under such account, annuity, or bond (as the case may be) which bears the same ratio to the total value of the amount so receivable as the total amount which was paid to or for such account, annuity, or bond and which was not allowable as a deduction under section 219 and was not such a rollover contribution bears to the total amount paid to or for such account, annuity, or bond. For purposes of this subsection, the term "annuity" means an annuity contract or other arrangement providing for a series of substantially equal periodic payments to be made to a beneficiary (other than the executor) for his life or over a period extending for at least 36 months after the date of the decedent's death.

(f) Lump sum distributions

(1) In general

An amount is described in this subsection if

(A) it is a lump sum distribution described in section 402(e)(4) (determined without regard to the third sentence of section 402(e)(4)(A)), or

(B) it is an amount attributable to accumulated deductible employee contributions (as defined in section 72(o)(5)(B)) in any plan taken into account for purposes of determining whether the distribution described in subparagraph (A) qualifies as a lump sum distribution.

(2) Exception where recipient elects not to take 10year averaging

An amount described in paragraph (1) shall be treated as not described in this subsection if the recipient elects irrevocably (at such time and in such manner as the Secretary may by regulations prescribe) to treat the distribution as taxable under section 402(a) (without the application of paragraph (2)

thereof), except to the extent that section 402(e)(4)(J) applies to such distribution.

(g) $100,000 Limitation on exclusions under subsections (c) and (e)

The aggregate amount excluded from the gross estate of any decedent under subsections (c) and (e) of this section shall not exceed $100,000.

(Aug. 16, 1954, ch. 736, 68A Stat. 384; Sept. 2, 1958, Pub. L. 85-866, title I, §§ 23(e), 67(a), 72 Stat. 1622, 1658; Oct. 10, 1962, Pub. L. 87-792, § 7(1), 76 Stat. 830; Mar. 8, 1966, Pub. L. 89-365, § 2(a), 80 Stat. 33; Dec. 30, 1969, Pub. L. 91-172, title I, § 101(j)(23), 83 Stat. 528; Oct. 27, 1972, Pub. L. 92-580, § 2(a), 86 Stat. 1276; Sept. 2, 1974, Pub. L. 93-406, title II, § 2008(b)(4), 88 Stat. 994; Oct. 4, 1976, Pub. L. 94-455, title XX, § 2009(c)(1)-(3), 90 Stat. 1894, 1895; Nov. 6, 1978, Pub. L. 95-600, title I, §§ 142(a), (b), 156(c)(4), title VII, § 702(j)(1), 92 Stat. 2796, 2803, 2931; Apr. 1, 1980, Pub. L. 96-222, title I, § 101(a)(8)(B), 94 Stat. 201; Aug. 13, 1981, Pub. L. 97-34, title III, §§ 311(d)(1), (h)(4), 313(b)(3), 95 Stat. 280, 282, 286; Sept. 3, 1982, Pub. L. 97-248, title II, § 245(a), (b), 96 Stat. 524; Jan. 12, 1983, Pub. L. 97-448, title I, § 103(c)(9), 96 Stat. 2377.)

AMENDMENTS

1983-Subsec. (f)(1). Pub. L. 97-448, § 103(c)(9)(A), designated existing provisions as subpar. (A), substituted "without regard to the third sentence of section 402(e)(4)(A))" for "without regard to the next to the last sentence of section 402(e)(4)(A)” in subpar. (A) as so designated, and added subpar. (B).

Subsec. (f)(2). Pub. L. 97-448, § 103(c)(9)(B), substituted "An amount described" for "A lump sum distribution described".

1982-Subsec. (c). Pub. L. 97-248, § 245(b), substituted "Subject to the limitation of subsection (g), notwithstanding any other provision of this section" for "Notwithstanding the provisions of this section".

Subsec. (e). Pub. L. 97-248, § 245(b), substituted "Subject to the limitation of subsection (g), notwithstanding any other provision of this section" for "Notwithstanding the provisions of this section".

Subsec. (g). Pub. L. 97-248, § 245(a), added subsec. (g).

1981-Subsec. (c). Pub. L. 97-34, § 311(d)(1), provided that for purposes of subsec. (c), any deductible employee contributions, within the meaning of par. (5) of section 72(o), shall be considered as made by a person other than the decedent.

Subsec. (e). Pub. L. 97-34, § 313(b)(3), inserted reference to rollover contribution described in section 405(d)(3).

Pub. L. 97-34, § 311(h)(4), substituted "section 219" for "section 219 or 220".

1980-Subsec. (f)(2). Pub. L. 96-222 substituted "(without the application of paragraph (2) thereof), except to the extent that section 402(e)(4)(J) applies to such distribution" for "without the application of paragraph (2) thereof".

1978-Subsec. (c). Pub. L. 95-600, § 142(a), substituted "(other than an amount described in subsection (f))" for "(other than a lump sum distribution described in section 402(e)(4), determined without regard to the next to the last sentence of section 402(e)(4)(A))" in the provisions preceding par. (1).

Subsec. (e). Pub. L. 95-600, §§ 156(c)(4), 702(j)(1), inserted "section 403(b)(8) (but only to the extent such contribution is attributed to a distribution from a contract described in subsection (c)(3))," following "403(a)(4)" and added “or 220" following "section 219" wherever appearing in provisions following par. (3).

Subsec. (f). Pub. L. 95-600, § 142(b), added subsec.

(f).

1976-Subsec. (c). Pub. L. 94-455, § 2009(c)(2), (3), substituted "other payment (other than a lump sum distribution described in section 402(e)(4), determined without regard to the next to the last sentence of section 402(e)(4)(A)) receivable by any beneficiary" for "other payment receivable by any beneficiary" in the provisions preceding par. (1) and substituted "For purposes of this subsection, contributions or payments on behalf of the decedent while he was an employee within the meaning of section 401(c)(1) made under a trust or plan described in paragraph (1) or (2) shall, to the extent allowable as a deduction under section 404, be considered to be made by a person other than the decedent and, to the extent not so allowable, shall be considered to be made by the decedent" for "For purposes of this subsection, contributions or payments on behalf of the decedent while he was an employee within the meaning of section 401(c)(1) made under a trust or plan described in paragraph (1) or (2) shall be considered to be contributions or payments made by the decedent" in the provisions following par. (4).

Subsec. (e). Pub. L. 94-455, § 2009(c)(1), added subsec. (e).

1974-Subsec. (c). Pub. L. 93-406 inserted reference to section 1452(d) in the provisions following par. (4). 1972-Subsec. (d). Pub. L. 92-580 added subsec. (d). 1969-Subsec. (c)(3). Pub. L. 91-172 substituted "section 170(b)(1)(A)(ii) or (vi), or which is a religious organization (other than a trust)," for "section 503(b) (1), (2), or (3),”.

1966 Subsec. (c). Pub. L. 89-365 added par. (4), inserted reference to chapter 73 of Title 10 of the United States Code in the enumeration of the plans and contracts set out in the prohibition against allowance of exclusion for that part of the value of the amount payable under the plan or contract in the proportion that the total payments or contributions made by the decedent bear to the total payments or contributions made, and provided that, for purposes of this section, amounts payable under chapter 73 of Title 10 are attributable to payments or contributions made by the decedent only to the extent of amounts deposited by him pursuant to section 1438 of Title 10.

1962-Subsec. (c). Pub. L. 87-792 substituted "was a plan described in section 403(a)" for "met the requirements of section 401(a)(3), (4), (5), and (6)” in par. (2), and inserted sentence providing, for purposes of this subsection, that contributions or payments on behalf of the decedent while he was an employee within the meaning of section 401(c)(1) made under a trust or plan described in paragraph (1) or (2) shall be considered to be contributions or payments made by the decedent.

1958-Subsec. (c)(2). Pub. L. 85-866, § 67(a), inserted "(4), (5), and (6)" following "section 401(a)(3)".

Subsec. (c)(3) and closing sentences. Pub. L. 85-866, § 23(e), added par. (3), inserted "or under contract described in paragraph (3)" in second sentence of subsec. (c) and substituted "paragraph (1) or (2) shall not be considered to be contributed by the decedent, and contributions or payments made by the decedent's employer or former employer toward the purchase of an annuity contract described in paragraph (3) shall, to the extent excludable from gross income under section 403(b)," for "this subsection shall" in third sentence of subsec. (c).

EFFECTIVE DATE OF 1983 AMENDMENT

Amendment by Pub. L. 97-448 effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981, Pub. L. 97-34, to which such amendment relates, see section 109 of Pub. L. 97-448, set out as a note under section 1 of this title.

EFFECTIVE DATE OF 1982 AMENDMENT

Section 245(c) of Pub. L. 97-248 provided that: "The amendments made by this section [amending this section] shall apply to the estates of decedents dying after December 31, 1982."

EFFECTIVE DATE OF 1981 AMENDMENT Amendment by section 311(d)(1) and (h)(4) of Pub. L. 97-34 applicable to taxable years beginning after Dec. 31, 1981, see section 311(i)(1) of Pub. L. 97-34, set out as a note under section 219 of this title.

Amendment by section 313(b)(3) of Pub. L. 97-34 applicable to redemptions after Aug. 13, 1981, in taxable years ending after such date, see section 313(c) of Pub. L. 97-34, set out as a note under section 405 of this title.

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-222 applicable with respect to the estates of decedents dying after Apr. 1, 1980, see section 101(b)(1)(D) of Pub. L. 96-222, set out as a note under section 691 of this title.

EFFECTIVE DATE OF 1978 AMENDMENT

Section 142(c) of Pub. L. 95-600 provided that: "The amendments made by this section [amending this section] shall apply with respect to the estates of decedents dying after December 31, 1978."

Amendment of subsec. (e) of this section by section 156(c)(4) of Pub. L. 95-600 applicable to distributions or transfers made after Dec. 31, 1977, in taxable years beginning after such date, see section 156(d) of Pub. L. 95-600, set out as a note under section 403 of this title. Section 702(j)(3)(A) of Pub. L. 95-600 provided that: "The amendment made by paragraph (1) [amending this section] shall apply to the estates of decedents dying after December 31, 1976."

EFFECTIVE DATE OF 1976 AMENDMENT

Section 2009(e)(3)(A) of Pub. L. 94-455 provided that: "The amendments made by paragraphs (1), (2), and (3) of subsection (c) [amending subsec. (c) and enacting subsec. (e) of this section] shall apply to the estates of decedents dying after December 31, 1976."

EFFECTIVE DATE OF 1974 AMENDMENT

Amendment by Pub. L. 93-406 applicable to taxable years ending on or after Sept. 21, 1972, with respect to individuals dying on or after Sept. 21, 1972, see section 2008(c) of Pub. L. 93-406, set out as a note under section 122 of this title.

EFFECTIVE DATE OF 1972 Amendment

Section 2(b) of Pub. L. 92-580 provided that: "The amendment made by subsection (a) [adding subsec. (d) of this section] shall apply with respect to estate of decedents for which the period prescribed by the Internal Revenue Code of 1954 for filing of a claim for credit or refund of an overpayment of estate tax ends on or after the date of enactment of this Act [Oct. 27, 1972]. No interest shall be allowed or paid on any overpayment of estate tax resulting from the application of the amendment made by subsection (a) for any period prior to the expiration of the one hundred and eightieth day following the date of the enactment of this Act. [Oct. 27, 1972]."

EFFECTIVE DATE OF 1969 AMENDMENT Amendment by Pub. L. 91-172 effective Jan. 1, 1970, see section 101(k)(1) of Pub. L. 91-172, set out as an Effective Date note under section 4940 of this title.

EFFECTIVE DATE OF 1966 Amendment Section 2(c) of Pub. L. 89-365 provided that: "The amendments made by subsection (a) [amending subsec. (c) of this section] shall apply with respect to decedents dying after December 31, 1965. The amend

ments made by subsection (b) [amending section 2517 of this title] shall apply with respect to calendar years after 1965."

EFFECTIVE Date of 1962 AMENDMENT Amendment by Pub. L. 87-792 applicable to taxable years beginning after Dec. 31, 1962, see section 8 of Pub. L. 87-792, set out as a note under section 37 of this title.

EFFECTIVE Date of 1958 Amendment

Section 67(b) of Pub. L. 85-866 provided that: "The amendment made by subsection (a) [amending subsec. (c)(2) of this section] shall apply with respect to estates of decedents dying after December 31, 1953."

Amendment of subsec. (c) by Pub. L. 85-866, § 23(e), applicable with respect to estates of decedents dying after Dec. 31, 1957, see section 23(g) of Pub. L. 85-866, set out as a note under section 403 of this title.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 406, 407, 2045, 6324 of this title.

§ 2040. Joint interests

(a) General rule

The value of the gross estate shall include the value of all property to the extent of the interest therein held as joint tenants with right of survivorship by the decedent and any other person, or as tenants by the entirety by the decedent and spouse, or deposited, with any person carrying on the banking business, in their joint names and payable to either or the survivor, except such part thereof as may be shown to have originally belonged to such other person and never to have been received or acquired by the latter from the decedent for less than an adequate and full consideration in money or money's worth: Provided, That where such property or any part thereof, or part of the consideration with which such property was acquired, is shown to have been at any time acquired by such other person from the decedent for less than an adequate and full consideration in money or money's worth, there shall be excepted only such part of the value of such property as is proportionate to the consideration furnished by such other person: Provided further, That where any property has been acquired by gift, bequest, devise, or inheritance, as a tenancy by the entirety by the decedent and spouse, then to the extent of one-half of the value thereof, or, where so acquired by the decedent and any other person as joint tenants with right of surviviorship and their interests are not otherwise specified or fixed by law, then to the extent of the value of a fractional part to be determined by dividing the value of the property by the number of joint tenants with right of survivorship.

(b) Certain joint interests of husband and wife

(1) Interests of spouse excluded from gross estate

Notwithstanding subsection (a), in the case of any qualified joint interest, the value included in the gross estate with respect to such interest by reason of this section is one-half of the value of such qualified joint interest.

(2) Qualified joint interest defined

For purposes of paragraph (1), the term “qualified joint interest" means any interest in property held by the decedent and the decedent's spouse as

(A) tenants by the entirety, or

(B) joint tenants with right of survivorship, but only if the decedent and the spouse of the decedent are the only joint tenants.

(Aug. 16, 1954, ch. 736, 68A Stat. 385; Oct. 16, 1962. Pub. L. 87-834, § 18(a)(2)(G), 76 Stat. 1052; Oct. 4, 1976, Pub. L. 94-455, title XX, § 2002(c)(1), (3), 90 Stat. 1855, 1856; Nov. 6, 1978, Pub. L. 95-600, title V, § 511(a), title VII, § 702(k)(2), 92 Stat. 2881, 2932; Apr. 1, 1980, Pub. L. 96-222, title I, § 105(a)(3), 94 Stat. 218; Aug 13, 1981, Pub. L. 97-34, title IV, § 403(c)(1)-(3)(A), 95 Stat. 301, 302.)

AMENDMENTS

1981-Subsec. (a). Pub. L. 97-34, § 403(c)(2), substituted "joint tenants with right of survivorship" for "joint tenants" in three instances.

Subsec. (b)(2). Pub. L. 97-34, § 403(c)(1), in redefining "qualified joint interest" substituted provision defining the term as meaning any interest in property held by the decedent and the decedent's spouse as tenants by the entirety, or joint tenants with right of survivorship, but only if the decedent and the spouse of the decedent are the only joint tenants for provision defining the term as meaning any interest in property held by the decedent and the decedent's spouse as joint tenants or as tenants by the entirety, but only if such joint interest was created by the decedent, the decedent's spouse, or both, in the case of personal property, the creation of such joint interest constituted in whole or in part a gift for purposes of chapter 12, or in the case of real property, an election under section 2515 applies with respect to the creation of such joint interest, and in the case of a joint tenancy, only the decedent and the decedent's spouse are joint tenants.

Subsecs. (c) to (e). Pub. L. 97-34, § 403(c)(3)(A), repealed subsec. (c), respecting value where spouse of decedent materially participated in farm or other business, subsec. (d), relating to joint interests of husband and wife created before 1977, and subsec. (e), covering treatment of certain post-1976 terminations.

1980-Subsec. (c)(1). Pub. L. 96-222, § 105(a)(3)(B), substituted "subsection (a)” for “subsections (a)". Subsec. (c)(2)(C). Pub. L. 96-222, § 105(a)(3)(A), added subpar. (C).

1978-Subsec. (c). Pub. L. 95-600, § 511(a), added subsec. (c).

Subsec. (d). Pub. L. 95-600, § 702(k)(2), added subsec.

(d).

Subsec. (e). Pub. L. 95-600, § 702(k)(2), added subsec.

(e).

1976-Pub. L. 94-455 designated existing provisions as subsec. (a), added the catchline for subsec. (a) as so designated, and added subsec. (b).

1962-Pub. L. 87-834 eliminated provisions which excepted real property outside of the United States.

EFFECTIVE DATE OF 1981 AMENDMENT

Amendment by Pub. L. 97-34 applicable to estates of decedents dying after Dec. 31, 1981, see section 403(e) of Pub. L. 97-34, set out as a note under section 2056 of this title.

EFFECTIVE DATE OF 1980 Amendment Amendment by Pub. L. 96-222 effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978, Pub. L. 95-600, to which such amendment relates, see section 201 of

Pub. L. 96-222, set out as a note under section 43 of this title.

EFFECTIVE DATE OF 1978 Amendment

Section 511(b) of Pub. L. 95-600 provided that: "The amendment made by subsection (a) [amending this section] shall apply with respect to estates of decedents dying after December 31, 1978."

EFFECTIVE DATE OF 1976 AMENDMENT

Section 2002(d)(3) of Pub. L. 94-455 provided that: "The amendment made by subsection (c) [amending sections 2040 and 2515(c) of this title] shall apply to joint interests created after December 31, 1976."

EFFECTIVE DATE OF 1962 Amendment

Amendment by Pub. L. 87-834 applicable, except as otherwise provided, to the estates of decedents dying after Oct. 16, 1962, 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 1023, 2045, 6324 of this title.

§ 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 exer

cise 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; Oct. 16, 1962, Pub. L. 87-834, § 18(a)(2)(H), 76 Stat. 1052; Oct. 4, 1976, Pub. L. 94-455, title XX, § 2009(b)(4)(A), 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 eliminated provisions which excepted real property situated outside of the United States.

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment of subsec. (a)(2) by section 2009(b)(4)(A) of Pub. L. 94-455 applicable to transfers creating an interest in the 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.