Estate of William Blake Burris - Page 5




                                        - 5 -                                         
                                     Discussion                                       
          I.  General Rules                                                           
               As a general rule, the Internal Revenue Code imposes a                 
          Federal tax “on the transfer of the taxable estate of every                 
          decedent who is a citizen or resident of the United States.”                
          Sec. 2001(a).  Such taxable estate, in turn, is defined as “the             
          value of the gross estate”, less applicable deductions.  Sec.               
          2051.  Section 2031(a) then specifies that the gross estate                 
          comprises “all property, real or personal, tangible or                      
          intangible, wherever situated”, to the extent provided in                   
          sections 2033 through 2045.                                                 
               Section 2042 governs the treatment of life insurance                   
          proceeds and provides in relevant part as follows:                          
               SEC. 2042.  PROCEEDS OF LIFE INSURANCE.                                
                    The value of the gross estate shall include the                   
               value of all property--                                                
                         *    *    *    *    *    *    *                              
                         (2) Receivable By Other Beneficiaries.--To                   
                    the extent of the amount receivable by all other                  
                    beneficiaries as insurance under policies on the                  
                    life of the decedent with respect to which the                    
                    decedent possessed at his death any of the                        
                    incidents of ownership, exercisable either alone                  
                    or in conjunction with any other person. * * *                    
               Regulations promulgated under section 2042 further explain             
          that “Section 2042 requires the inclusion in the gross estate of            
          the proceeds of insurance on the decedent’s life not receivable             
          by or for the benefit of the estate if the decedent possessed at            





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  Next

Last modified: May 25, 2011