Estate of Tamulis v. Commissioner

POSNER, Circuit Judge.

This appeal involves the tax treatment of a charitable remainder trust — a trust in which the income goes to individuals during their lifetime (or some other period) but what remains after their rights expire goes to charity. Until 1969 the estimated present value of the remainder was what was deductible from the federal estate tax. But that year, concerned that the trustee might invest the trust’s assets in a way calculated to maximize current income, with the result that when finally received by the charity the remainder would be worth less than the estimated actuarial…