Estate of Willis Edward Clack, Deceased, Marshall & Ilsley Trust Company, Co-Personal Representative, and Richard E. Clack, Co-Personal Representative - Page 9

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               On November 10, 1988, the Internal Revenue Service (IRS)               
          selected the estate tax return for audit.  In January of 1989,              
          the coexecutors and the IRS agreed that the value of each share             
          of the Clack Corp. stock was $10 more than reported on the estate           
          tax return.  At the time of his death, decedent owned 24,675                
          shares of Clack Corp. stock, of which 12,689 shares were                    
          bequeathed to Richard E. Clack.  The remaining 11,986 shares were           
          treated by the coexecutors as part of the marital trust.                    
               On March 28, 1991, respondent issued a statutory notice of             
          deficiency to the estate, determining an estate tax deficiency of           
          $2,284,008.  The principal adjustment was the disallowance of               
          $4,162,439.24 of the marital deduction because of respondent’s              
          determination that the "spouse's entire interest in the marital             
          trust was subject to a power in the executors to appoint the                
          corpus to someone other than the surviving spouse."                         
                                       OPINION                                        
               Section 2001 imposes a tax on the transfer of the taxable              
          estate of any person who is a citizen or resident of the United             
          States at the time of death.  Section 2056(a) allows a marital              
          deduction from a decedent's gross estate for the value of                   
          property interests passing from the decedent to the decedent’s              
          surviving spouse.  As a general rule, however, a marital                    
          deduction is denied for a "terminable interest", that is, a                 
          property interest that will terminate or fail "on the lapse of              
          time, on the occurrence of an event or contingency, or on the               
          failure of an event or contingency to occur".  Sec. 2056(b)(1).             




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