Divided Tax Court now allows estate tax marital deduction for QTIP property contingent on executor's QTIP election for estates of decedents dying before Mar. 2, 1994.
Regs. Sec. 20.2056(b)-7(d) (3) reads as follows:
Contingent income interests. An income interest granted for a term of years, or a life estate subject to termination upon the occurrence of a specified event (e.g., remarriage), is not a qualifying income interest for life. In addition, an income interest (or life estate) that is contingent upon the executor's election under section 2056(b) (7) (B) (v) is not a qualifying income interest for life, regardless of whether the election is actually made. (Emphasis added.)
This regulation is effective for estates of decedents dying after Mar. 1, 1994.
Consequently, the Tax Court's decision concluded as follows:
One caveat to our holding is in order. Section 20.2056 (b)-7(d) (3), Estate Tax Regs., provides that the marital deduction is not available under the circumstances of the instant case. Because the regulation is effective for estates of decedents dying after March 1, 1994 (see section 20.2056(b)-10...), it is not applicable to the instant case. Consequently, we leave for another day the issue of the validity of that regulation. Obviously, if the regulation were held to be valid, there might be a different result for estates of decedents dying after March 1, 1994. (Footnote omitted.)
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|Title Annotation:||qualified terminable interest property|
|Publication:||The Tax Adviser|
|Article Type:||Brief Article|
|Date:||May 1, 1996|
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