Estate of Judith U. Harrison - Page 4




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               The wills admitted to probate pursuant to the April 1994               
          orders each created a trust in which the surviving spouse was               
          given a life estate.  In addition, for purposes of effectuating             
          these trusts, the will of each decedent provided that if the                
          spouses died simultaneously, or under circumstances rendering it            
          difficult or impossible to determine order of death, the other              
          spouse would be conclusively presumed to have survived the                  
          decedent.  Based on the foregoing provisions, estate tax returns            
          were prepared which treated each spouse as having passed a life             
          interest to the other and which claimed a section 2013 credit for           
          tax on prior transfers with respect to the reciprocal interest so           
          received.  In calculating the amount of the credit, the life                
          interests were valued utilizing the actuarial formulas and tables           
          set forth by the Internal Revenue Service in Notice 89-24, 1989-1           
          C.B. 660, and Notice 89-60, 1989-1 C.B. 700.  Respondent’s                  
          disallowance of these credits is the subject of the instant                 
          controversy.                                                                
                                     Discussion                                       
               Broadly stated, the principal issue in this case is whether            
          the estates are entitled to credits for tax on prior transfers              
          pursuant to section 2013.  As more narrowly framed by the                   
          contentions of the parties and the facts before us, resolution of           
          this inquiry turns on whether the estates are entitled to value             








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