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3. Whether the Stream of Payments Constitutes an Interest
in the Agency Stock Which Qualifies for the Marital
Deduction
Even with the stock subject to a condition subsequent, the
surviving spouse inherited either the right to receive the stream
of monthly payments or, ultimately, the stock. Petitioner argues
that since the surviving spouse was entitled to either the stock
or the stream of payments, he was vested in a property interest
in the stock that passed from decedent at her death. Respondent
argues that, as no payments were actually made, there can be no
marital deduction since no property passed from decedent to the
surviving spouse. Respondent also points out that petitioner has
settled this issue by entering into the following "Stipulation of
Settled Issue":
Since the payments called for in the codicil,
namely the sum of $3,750.00 per month for a period of
ten years, have not been made, petitioner no longer
contends that the payments, had they been made, would
have qualified for the marital deduction pursuant to
I.R.C. section 2056.
Focusing on the phrase "no longer contends", we will treat this
"Stipulation of Settled Issue" as a concession by petitioner.
Respondent believes that petitioner has restricted itself to
arguing that the surviving spouse inherited the stock at
decedent's death, rather than an interest in the stock
represented by the payments. Petitioner seems to treat the
concession as an abandonment of its original pleading that the
payments themselves qualify for the marital deduction. However,
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