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to his or her spouse; (3) that the property interest is a
deductible interest; and (4) the value of that property interest.
Sec. 20.2056(a)-1(b), Estate Tax Regs. Item (1) is not in
dispute, and only petitioner has addressed item (4), which we
need not address for the reason stated below. Deductions are a
matter of legislative grace; petitioner has the burden of showing
that it is entitled to any deduction claimed. New Colonial Ice
Co. v. Helvering, 292 U.S. 435, 440 (1934).
2. Whether the Agency Stock Qualifies for the Marital
Deduction
We have held that the agency stock was inherited by Patricia
Low subject to a condition subsequent. Patricia Low did not make
the payments called for in decedent's will. Therefore, Patricia
Low was divested of her rights to the agency stock and they were
passed to her father, the surviving spouse. However, at the time
of decedent's death, the agency stock did not pass to the
surviving spouse. "It is well settled that the nature of the
interest in property passing to the surviving spouse and the
valuation of that interest are to be determined as of the time of
decedent's death." Provident Natl. Bank v. United States, 581
F.2d 1081, 1086 (3d Cir. 1978) (citing Jackson v. United States,
376 U.S. 503, 508 (1964)); sec. 20.2056(b)-4(a), Estate Tax Regs.
Therefore, we hold that the agency stock is not eligible for the
marital deduction.
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