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Estate of Nicholson v. Commissioner, 94 T.C. 666, 681-682 (1990)
(citations omitted).
Pursuant to section 2056(a), the estate may claim, as a
marital deduction, the value of property passing to the surviving
spouse. As a general rule, the marital deduction is denied for a
“terminable interest”. Estate of Nicholson v. Commissioner,
supra at 671. A “terminable interest”, generally, is a property
interest that will terminate or fail “on the lapse of time, on
the occurrence of an event or contingency, or on the failure of
an event or contingency to occur”. Sec. 2056(b)(1). An interest
in the nature of a life estate, therefore, is ineligible for the
marital deduction pursuant to section 2056(b)(5). Estate of
Nicholson v. Commissioner, supra at 671-672.
The Economic Recovery Tax Act of 1981 (ERTA), Pub. L. 97-34,
95 Stat. 172, modified the rules for the marital deduction
relating to terminable interests. ERTA sec. 403(d)(1), 95 Stat.
302, added section 2056(b)(7), which allows a marital deduction
5(...continued)
In the context of sec. 7491, by failing to raise the sec. 7491(a)
argument at or before trial, petitioner prejudiced respondent’s
ability to present evidence that petitioner did not meet the
requirements of sec. 7491(a)--e.g., that petitioner did not
comply with the substantiation requirements or that petitioner
was not cooperative.
We note, however, because we make our determination on the
basis of the evidence in the record rather than on a failure to
carry the burden of proof by a party bearing the burden, our
decision in this case does not depend on which party bears the
burden of proof.
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