Estate of Henry A. Lassiter, deceased, Paula Ann Masters Lassiter, administrator, C.T.A. - Page 27

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                    (b) Limitation in the Case of Life Estate or Other                  
               Terminable Interest.--                                                   
                         (1) General rule.--Where, on the lapse of                      
                    time, on the occurrence of an event or                              
                    contingency, or on the failure of an event or                       
                    contingency to occur, an interest passing to the                    
                    surviving spouse will terminate or fail, no                         
                    deduction shall be allowed under this section with                  
                    respect to such interest--                                          
                               (A) if an interest in such property                      
                         passes or has passed (for less than an                         
                         adequate and full consideration in money or                    
                         money’s worth) from the decedent to any                        
                         person other than such surviving spouse (or                    
                         the estate of such spouse); and                                
                               (B) if by reason of such passing such                    
                         person (or his heirs or assigns) may possess                   
                         or enjoy any part of such property after such                  
                         termination or failure of the interest so                      
                         passing to the surviving spouse;                               
                               *    *    *    *    *    *     *                         
                         (7) Election with respect to life estate for                   
                    surviving spouse.--                                                 
                               (A) In general.--In the case of                          
                         qualified terminable interest property--                       
                                    (i) for purposes of subsection (a),                 
                               such property shall be treated as                        
                               passing to the surviving spouse, and                     
                                    (ii) for purposes of paragraph                      
                               (1)(A), no part of such property shall                   
                               be treated as passing to any person                      
                               other than the surviving spouse.                         
                               (B) Qualified terminable interest                        
                         property defined.--For purposes of this                        
                                    (i) In general.--The term                           
                               “qualified terminable interest property”                 
                               means property--                                         

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