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Discussion
Generally, in computing the estate tax imposed by
section 2001, section 2055(a) allows the amount of all
bequests, legacies, devises, or transfers to or for the use
of any corporation organized and operated exclusively for
religious or charitable purposes to be deducted from the
value of the decedent's gross estate. Respondent does not
question the fact that a bequest or gift to Millbrook
United Methodist Church is eligible to be deducted under
section 2055(a). Only the amount of the deduction is at
issue in this case.
If the tax imposed by section 2001 or any inheritance
tax is payable out of the charitable bequests, then section
2055(c) limits the amount of the deduction to the amount of
such bequests reduced by the amount of the taxes. Section
2055(c) provides as follows:
SEC. 2055(c) Death Taxes Payable Out of
Bequests.--If the tax imposed by section 2001,
or any estate, succession, legacy, or inheritance
taxes, are, either by the terms of the will, by
the law of the jurisdiction under which the
estate is administered, or by the law of the
jurisdiction imposing the particular tax, payable
in whole or in part out of the bequests,
legacies, or devises otherwise deductible under
this section, then the amount deductible under
this section shall be the amount of such
bequests, legacies, or devises reduced by the
amount of such taxes.
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