66 STAT.]
PUBLIC LAW 58—JUNE 28, 1951
93
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 the 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. " (4) CREATION OF ANOTHER POWER I N CERTAIN CASES.—To the
extent of any property with respect to which the decedent (1) by will or (2) 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 subsection (c), 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. " (5) 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 rule of 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 per centum 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." (b) DATE OF CREATION OF POWER.—For the 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. (c) EFFECTIVE DATE.—The amendments made by this section shall be effective as if made by section 403 of the Revenue Act of 1942 on 56 stat 942. the date of its enactment (applicable with respect to estates of decedents 812,826', m,m not-^! dying after October 21, 1942). SEC. 3. GIFT TAX—POWERS OF APPOINTMENT. (a) Section 1000(c) of the Internal Revenue Code (relating to eestat.952. powers of appointment) is hereby amended to read as follows: aeU.S.C.jiooocc). " (c) POWERS OF APPOINTMENT.— " (1) EXERCISE OF GENERAL POWER OF APPOINTMENT CREATED ON O BEFORE OCTOBER 21, 1942.—An exercisc of a general power of R
appointment created on or before October 21, 1942, shall be deemed a transfer of property by the individual possessing such power; but the failure to exercise such a power or the complete release of such a power shall not be deemed an exercise thereof. "If before November 1, 1951, or within the time limited by paragraph (2) of section 452(b) of the Revenue Act of 1942,
�
