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that the estate is not entitled to a deduction for the charitable
bequests for more than the amount allowed by respondent.5
The 1995 Protocol added to the convention article XXIX B,
paragraph 1,6 which provides:
Where the property of an individual who is a
resident of a Contracting State passes by reason of the
individual’s death to an organization referred to in
paragraph 1 of Article XXI (Exempt Organizations), the
tax consequences in a Contracting State arising out of
the passing of the property shall apply as if the
organization were a resident of that State.
In the instant case, this provision takes precedence over the
statute according to the “last-in-time” rule.7 Whitney v.
4(...continued)
v. Commissioner, 54 T.C. 1407, 1415-1416 (1970) (bequest to
Canadian foundation to be used for the benefit of Canadian
students attending college in the United States).
5 Further, the regulations direct us to compute the
deduction in the same manner as the one allowed under sec. 2055.
Sec. 20.2106-1(a)(2), Estate Tax Regs. A deduction is allowed
from the gross estate of a decedent under sec. 2055(a) “for the
value of property included in the decedent’s gross estate and
transferred by the decedent during his lifetime or by will”.
Sec. 20.2055-1(a), Estate Tax Regs.
6 We note that Canada does not impose an estate tax. At
death, the capital assets of a decedent are deemed to be disposed
of, and any resulting gains generally are subject to Canadian
income tax. This provision in the 1995 Protocol was intended to
coordinate U.S. estate tax provisions with the relevant
provisions in the Canadian income tax. S. Exec. Rept. 104-9, at
9-10 (1995).
7 The U.S. Supreme Court generally described the “last-in-
time” rule as follows:
By the Constitution a treaty is placed on the same
footing, and made of like obligation, with an act of
(continued...)
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