T.C. Memo. 2004-166
UNITED STATES TAX COURT
ESTATE OF DAVID KATZ, DECEASED, SARAH KATZ, EXECUTRIX, Petitioner
v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 1462-03. Filed July 14, 2004.
D executed a will in 1991 which provided for the
creation of a trust that was to be funded with an
amount equal to the “aggregate federal estate tax
exemption equivalent”. Following D’s death in 1998,
D’s wife filed a qualified disclaimer, disclaiming both
her interest in the trust, and also in five securities.
R determined that the trust was funded by (1)
assets in an amount equal to the “aggregate federal
estate tax exemption equivalent” and (2) the interests
in the securities disclaimed by D’s wife. R determined
that the estate was liable for a deficiency in estate
tax because of the bequests disclaimed by D’s wife.
Held: The trust was funded both by (1) assets in
an amount equal to the “aggregate federal estate tax
exemption equivalent”, and also by (2) the interests in
the securities disclaimed by D’s wife. Since the trust
was therefore overfunded, the estate is liable for a
deficiency in estate tax, as determined by respondent.
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