Powers of Appointment Under Section 2801

Offshore Tax with HTJ.tax · Apr 13, 2026 · 1m

Section 2801 of the Internal Revenue Code does not only apply to direct gifts or inheritances—it also captures indirect transfers through powers of appointment. This significantly expands the reach of the regime.⚖️ 1️⃣ What Is a Power of Appointment?A power of appointment allows an individual to:• Decide who will receive certain assets • Control distribution without owning the assets directlyA general power of appointment is particularly broad—it can allow the holder to:• Appoint assets to themselves, their estate, or their creditors🔁 2️⃣ When Does §2801 Apply?If a covered expatriate:•…