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investment income generated by the estate's assets from reaching
decedent and becoming part of decedent's taxable estate. As
noted above, Garry's bequest to decedent qualified for the
maximum marital deduction then allowable for Federal estate tax
purposes. Decedent’s effective deflection away from herself of
her marital share of the investment income of Garry’s estate is
inconsistent with the policies underlying the allowance of the
marital deduction on the transfer of the assets giving rise to
that income. See sec. 20.2056(b)-4(a), Estate Tax Regs. (in
determining the value of an interest in property passing to the
spouse for purposes of the marital deduction, account must be
taken of the effect of any material limitations upon the
surviving spouse's right to income from the property);10 sec.
20.2056(b)-5(a), Estate Tax Regs. (in order for an interest in
property to qualify as a deductible life estate under section
10 The promulgation, in the wake of Commissioner v. Estate
of Hubert, 520 U.S. 93 (1997), of proposed regulations addressing
in detail the circumstances in which the use of estate income to
pay administration expenses will be considered a material
limitation on the value of the residue for purposes of the estate
tax charitable and marital deductions, see secs. 20.2055-1(d)(6),
20.2056(b)-4(e), Proposed Estate Tax Regs., 63 Fed. Reg. 69248,
69250-69251 (Dec. 16, 1998), evidences the continuing importance
of this issue. The “qualified terminable interest property”
(QTIP) rules, enacted in 1981–-after Garry’s death in 1979–-also
evidence Congress’ continuing concern that the surviving spouse
receive all income from any property qualifying for the marital
deduction. See sec. 2056(b)(7)(B)(ii)(I) (property is not QTIP
unless the surviving spouse is entitled to all the income from
the property, payable annually or at more frequent intervals, or
has a usufruct interest for life).
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