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distinction without a difference”, respondent argues that any
comparison between them is “inapposite”.
Inasmuch as State law is the source of legal rights and
interests in property and income, we first ascertain the legal
and economic characteristics of the Florida elective share under
the Florida Probate Code as compared with Florida statutory
dower. In so doing, we are bound and guided by the relevant
rulings of the Florida Supreme Court, Commissioner v. Estate of
Bosch, 387 U.S. 456, 465 (1967), and give “proper regard” to
rulings of the lower Florida courts, id. We then determine the
effect of those legal rights and interests for Federal income tax
purposes in accordance with Federal income tax principles and
rules. Morgan v. Commissioner, 309 U.S. 78, 81 (1940); Lyeth v.
Hoey, 305 U.S. 188, 193-194 (1938); Jones v. Whittington, 194
F.2d 812, 815 (10th Cir. 1952).
We agree with petitioner and conclude that the distribution
rules of subchapter J do not apply to her Florida elective share.
The legal and economic differences between petitioner's interest
in the Florida elective share and the interests of the residuary
beneficiaries are so significant that their respective interests
must be treated differently for Federal income tax purposes. The
Florida elective share, which replaced statutory dower in 1975,
should be accorded the same Federal income tax treatment as
statutory dower because they have common legal and economic
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