Release number 200022035 of 2000-06-02

• Date: 02 June 2000
• Year: 2000
• Record Number: 200022035
• UILC Number: 678.00-00

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