Estate of Milada S. Neumann, Deceased, Eric W. Shaw, Ancillary Administrator, C.T.A. - Page 1

                                          106 T.C. No. 10                                              

                                     UNITED STATES TAX COURT                                           

                       ESTATE OF MILADA S. NEUMANN, DECEASED, ERIC W.                                  
                   SHAW, ANCILLARY ADMINISTRATOR, C.T.A., Petitioner v.                                
                        COMMISSIONER OF INTERNAL REVENUE, Respondent                                   

                  Docket No. 11060-94.                    Filed April 9, 1996.                         

                        Decedent, a nonresident alien, died in 1990.  She                              
                  bequeathed U.S. situs property outright to her                                       
                  grandchildren.  In 1986, bequests of this type, i.e.,                                
                  "direct skips", were first subjected to the generation-                              
                  skipping transfer (GST) tax provisions of secs. 2601                                 
                  through 2663, I.R.C.  At the time of decedent's death,                               
                  regulations dealing with "direct skips" had not been                                 
                  issued.  Held, the bequests are subject to the GST tax.                              
                  The issuance of regulations in respect of "direct                                    
                  skips" by nonresident aliens provided for in sec.                                    
                  2663(2), I.R.C., is not a condition precedent to the                                 
                  imposition of the GST tax on such "direct skips" but                                 
                  merely authorizes the Secretary to prescribe the                                     
                  allocations and calculations involved in determining                                 
                  how such tax should be imposed.                                                      

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