Release number 200022035 of 2000-06-02

Date02 June 2000
Year2000
Record Number200022035
UILC Number678.00-00
Internal Revenue Service
Index Number: 678.00-00
Number: 200022035
Release Date: 6/2/2000
Department of the Treasury
Washington, DC 20224
Person to Contact:
Telephone Number:
Refer Reply To:
CC:DOM:P&SI:2 - PLR-114654-99
Date:
March 3, 2000
G=
B=
Trust 1 =
Trust 2 =
D1 =
D2 =
Year 1 =
Dear :
This is in reply to your letter, dated August 13, 1999, and
subsequent correspondence, submitted on behalf of Trust 2
requesting various rulings concerning whether and to what extent
B will be treated as the owner of Trust 2 under § 678 of the
Internal Revenue Code.
On D1 G created a revocable trust, Trust 1. Following G’s
death on D2, a marital trust and residual trust, Trust 2, were
created pursuant to the provisions of Trust 1. Under the
provisions of Trust 2, B, as the income beneficiary, has a
lifetime power to appoint all or any part of the Trust 2 income.
In addition, B has the noncumulative power to withdraw annually
from the corpus of Trust 2 an amount not exceeding five thousand
dollars or five percent of the market value of the net principal
of Trust 2. This type of power in a trust is commonly referred
to as a "five or five" power. With the exception of a partial
withdrawal in Year 1, B has not exercised this five or five
power.
Section 678(a) provides that a person other than the grantor
shall be treated as the owner of any portion of a trust with
respect to which (1) such person has a power exercisable solely

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