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spouse”. The parties in this case disagree as to the proportion
of the California real estate contained in decedent’s residuary
estate which should be considered to have passed from him to his
surviving spouse for purposes of the section 2056 deduction, and
we note that this appears to be a matter of first impression.
Following execution of a distribution agreement by
decedent’s residuary beneficiaries and in accordance with an
order by the California Superior Court, decedent’s wife received
decedent’s one-half interest in both the Monte Vista property and
the Calle Victoria property. Regulations promulgated under
section 2056 provide as follows with regard to will contests and
other assignments or surrenders of property in the context of the
marital deduction:
If as a result of the controversy involving the
decedent’s will, or involving any bequest or devise
thereunder, a property interest is assigned or
surrendered to the surviving spouse, the interest so
acquired will be regarded as having “passed from the
decedent to his surviving spouse” only if the
assignment or surrender was a bona fide recognition of
enforceable rights of the surviving spouse in the
decedent’s estate. Such a bona fide recognition will
be presumed where the assignment or surrender was
pursuant to a decision of a local court upon the merits
in an adversary proceeding following a genuine and
active contest. However, such a decree will be
accepted only to the extent that the court passed upon
the facts upon which deductibility of the property
interests depends. If the assignment or surrender was
pursuant to a decree rendered by consent, or pursuant
to an agreement not to contest the will or not to
probate the will, it will not necessarily be accepted
as a bona fide evaluation of the rights of the spouse.
[Sec. 20.2056(c)-2(d)(2), Estate Tax Regs.]
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