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limited to the proportionate part of the U.S. assets
that passes to the charitable legatees.
Respondent calculated the deduction as follows: ($516,268/$100
million) x $312,840 = $1,615 (i.e., the value of U.S. assets over
the value of worldwide assets multiplied by the amount of
charitable bequests in issue).
Discussion
The estate argues that the value of decedent’s charitable
bequests is deductible in full pursuant to article XXIX B of the
convention, as amended by the 1995 Protocol. Respondent argues
that only a proportional deduction is allowed because there is no
direction in the will regarding which property is to be used to
fund the bequests.
A decedent who is not a resident or citizen of the United
States is subject to a tax on the transfer of the taxable estate
which is situated in the United States at the time of the
decedent’s death (estate tax). Secs. 2101, 2103. Section
2106(a)(2)(A)(ii) allows a deduction from the value of the
decedent’s taxable estate for bequests to a domestic corporation
organized and operated for charitable purposes.3 Further, this
3 This section provides, in relevant part:
SEC. 2106. TAXABLE ESTATE
(a) Definition of Taxable Estate.--For purposes
of the tax imposed by section 2101, the value of the
taxable estate of every decedent nonresident not a
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