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purposes because of Mrs. Street's alleged one-half community
property interest.
The problem presented here involves the application of both
State and Federal law, and we treat them in that order.
Generally State law determines the ownership of property, Poe v.
Seaborn, 282 U.S. 101 (1930), which means here that Texas
property law determines the ownership of the insurance policies
and proceeds therefrom on decedent's life. On the other hand,
such property rights, once determined under State law, will be
taxable as the Code provides, and that is a Federal matter,
Morgan v. Commissioner, 309 U.S. 78 (1940); Broday v. United
States, 455 F.2d 1097 (5th Cir. 1972).
In determining the binding or persuasive effect of State
court decrees on Federal courts, interpreting the application of
State law, the Supreme Court has acknowledged that where State
law governs the ownership of property (as here), the State's
highest court is the best authority on its own law; the opinion
of a lower State court will not be binding on a Federal court,
but the ruling of such State court is not to be disregarded by a
Federal court unless it is considered that the State's highest
court would decide otherwise. If there is no decision by the
State's highest court, the Federal court must do the best it can
to discern what such State's highest court would decide.
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