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the proper date for determining whether the surviving spouse has
a qualifying income interest for life in the property.
I agree that the election under section 2056(b)(7)(B)(v),
like any other election that an executor makes under the estate
tax provisions, must be made after the date of death of the
decedent. However, I think the election can be made only as to
an otherwise qualifying income interest in the property and that
the election itself cannot qualify otherwise nonqualifying
property. The definition of an interest in property in section
2056(b)(7)(B)(iii), the definition of a specific portion of
property in section 2056(b)(7)(B)(iv), and the phrase "any
property" in the definition of an election in section
2056(b)(7)(B)(v) do not change that result. Whatever the nature
of the property, whatever the interest in the property, or
whatever the specific portion of the property, the statute
requires the surviving spouse to have a "qualifying income
interest for life" in that "property".
(...continued)
8 months after husband and her income interest in husband's
estate is the only property in which she has any interest. If
the executor of husband's estate files the estate tax return
before wife dies and elects on the return to treat one-half of
the property as QTIP, husband's estate will get a marital
deduction for $600,000 leaving $600,000 in his estate. Wife's
estate will include the $600,000 QTIP property. Neither estate
will be subject to tax (sheltered by husband's and wife's
respective unified credit). If, on the other hand, husband's
executor does not file the estate tax return until after wife's
death, no QTIP election may be made, $600,000 of husband's estate
is taxable, and wife's unified credit is wasted.
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