Rosalyn Deutsch - Page 1

                                 T.C. Memo. 1997-470                                  

                               UNITED STATES TAX COURT                                

                           ROSALYN DEUTSCH, Petitioner v.                             
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 21845-93.             Filed October 15, 1997.               

                    Decedent (D), who died in 1988, bequeathed his                    
               spouse (P) minimal assets from a net estate of                         
               $3,361,683.  In 1989, P elected against D's will to                    
               take the Florida elective share of 30 percent of the                   
               net estate, or $1,008,504.  The estate reported 1989                   
               distributable net income (DNI) of $707,095, including                  
               $176,432 of capital gains that D's personal                            
               representative treated as estate income, and $377,753                  
               of distributions to the estate from D's individual                     
               retirement accounts.  Pursuant to order of the Florida                 
               Probate Court, D's personal representative paid P the                  
               elective share in 1989, but made no distributions to                   
               the residuary beneficiaries until 1990.  The personal                  
               representative claimed a distribution deduction of                     
               $707,095 for 1989 under sec. 661(a), I.R.C., on the                    
               ground that all the estate's DNI had been included in                  
               the payments to P in satisfaction of her elective                      
               share.  P did not include in her gross income any part                 
               of the elective share.                                                 

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