Cite as: 520 U. S. 93 (1997)
Opinion of Kennedy, J.
itable deduction by only the discounted value of the actual administration expenses, whereas the Commissioner insists on a dollar-for-dollar reduction. The dissenters' wait-andsee approach to the valuation inquiry, however, is still at odds with the valuation inquiry required by the regulations: What is the net value of the marital or charitable bequest on the controlling valuation date, determined as if it were a gift to the spouse?
The Commissioner directs us to the language of § 2056(b)(4), which says:
"In determining . . . the value of any interest in property passing to the surviving spouse for which a deduction is allowed by this section—
. . . . .
"(B) where such interest or property is encumbered in any manner, or where the surviving spouse incurs any obligation imposed by the decedent with respect to the passing of such interest, such encumbrance or obligation shall be taken into account in the same manner as if the amount of a gift to such spouse of such interest were being determined."
We interpreted this language in United States v. Stapf, 375 U. S. 118 (1963). The husband's will there gave property to his wife, conditioned on her relinquishing other property she owned to the couple's children. We held that the husband's estate was entitled to a marital deduction only to the extent the value of the property the husband gave his wife exceeded the value of the property she relinquished to receive it. The marital deduction, we explained, should not exceed the "net economic interest received by the surviving spouse." Id., at 126. The statutory language, as we interpreted it in Stapf, is consistent with our analysis here. Where the will requires or allows the estate to pay administration expenses from income that would otherwise go to the surviving spouse, our analysis requires that the marital
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