Cite as: 520 U. S. 93 (1997)
Breyer, J., dissenting
sioner, 974 F. 2d 723 (CA6 1992); Estate of Roney, 33 T. C. 801 (1960), aff'd per curiam, 294 F. 2d 774 (CA5 1961); Reply Brief for Petitioner 15. Justice Scalia explains why the Commissioner's interpretation is consistent with the regulation's language and the statute it interprets. I add a brief explanation as to why I believe that it is consistent with basic statutory and regulatory tax law objectives as well.
The regulation, which speaks of the "net value" of what passes to the spouse, requires a realistic valuation of the interest left to the spouse as of the date of the decedent's death. Assume, for example, that a decedent leaves his entire estate to his wife in trust, with the proviso that the administrator pay 25% of the income earned by the estate assets during the period of administration to the decedent's son. Assume that the period of administration lasts several years and that the estate generates several million dollars in income during that time. On these assumptions, the son will have received an important asset (included in the estate's date-of-death value) that the surviving spouse did not receive, namely, the right to a portion of the estate's income over a period of several years. Were estate tax law to fail to take account of this fact (that the son, not the wife, received that asset), it would permit a valuable asset (the right to that income) to pass to the son without estate tax. But estate tax law does seem realistically to appraise the "net value" of what passes to the wife in such circumstances. See 26 CFR §§ 20.2056(b)-5(f)(9), 20.2056(b)-4(a) (1996); 4 A. Casner, Estate Planning § 13.11, pp. 138-139, and § 13.14.6, n. 18 (5th ed. 1988); cf. Estate of Friedberg, 63 TCM 3080 (1992), ¶ 92,310 P-H Memo TC (delay in payment of a specific bequest to a surviving spouse reduces its marital deduction value). And that being so, why would it not take account of the similar limitation on the right to income at issue here? The fact that the administrator uses estate income to pay administration expenses, rather than to make a bequest to the son, makes no difference from a marital deduction
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