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meaning of section 2055(a)(3). E.g., Kaplun v. United States,
436 F.2d 799 (2d Cir. 1971); Natl. Sav. & Trust Co. v. United
States, 193 Ct. Cl. 775, 436 F.2d 458 (1971). The Internal
Revenue Service has adopted this position, as follows: “A
deduction is allowable under section 2055 of the Code with
respect to a transfer of property to a foreign government or
political subdivision thereof for exclusively charitable
purposes.” Rev. Rul. 74-523, 1974-2 C.B. 304. Conversely,
“where the use of such property is not limited to exclusively
charitable purposes within the meaning of sections 2055(a)(2) and
2055(a)(3)”, the deduction will be disallowed. Id.
B. Contentions of the Parties
The estate argues that if the assets transferred to Trust B
are included in decedent’s gross estate, charitable deductions
are allowable for the bequests thereunder to the American Cancer
Society, Yale Law School, and the State of Israel. It is the
estate’s position that even if the disclaimer was not qualified
under section 2518, it was nonetheless effective for State law
purposes. Therefore, according to the estate, decedent is
treated as having made gifts to the corresponding beneficiaries
when property was distributed pursuant to the terms of Trust B.
Respondent cites three principal reasons why the
distributions made to entities specified in Trust B do not yield
charitable deductions. The estate responds to each such
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