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trustees to distribute the corpus to decedent for her comfort,
maintenance, and support. The corpus of the Item II trust
consisted of terminable interest property in which decedent had
an income interest for life.
The Item II trust authorized the executors of the Estate of
James Letts, Jr., to elect to treat the trust as "qualified
terminable interest property" (QTIP) for purposes of the Federal
estate tax marital deduction. If the executors made a QTIP
election, the trustees were directed to pay the Federal estate
tax that resulted from including the marital property in
decedent's estate under sections 2044 and 2207A.
Item III of the will of James Letts, Jr., created a trust
(Item III trust) for the benefit of decedent and the living
descendants of James Letts, Jr. When decedent died, the
undistributed income from the Item II trust was to be paid to
decedent's estate and the corpus was to be paid to the Item III
trust.
C. The Federal Estate Tax Return of James Letts, Jr.
James Letts, Jr., died on November 7, 1985. Ralph M.
Newberry, a certified public accountant, prepared his Federal
estate tax return. The gross estate reported on the return was
$1,877,372.
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