Estate of Levitt v. Commissioner
United States Tax Court
On June 12, 1975, D executed a trust agreement and made an inter vivos transfer of certain property to the trust. On Mar. 6, 1978, D amended the trust agreement in its entirety. The amended trust agreement contains a formula which refers to the maximum marital deduction. D died intestate on May 13, 1985. Held, the formula in the trust is not the type of "formula" contemplated by sec. 403(e)(3), Economic Recovery Tax Act of 1981, Pub.
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On June 12, 1975, D executed a trust agreement and made an inter vivos transfer of certain property to the trust. On Mar. 6, 1978, D amended the trust agreement in its entirety. The amended trust agreement contains a formula which refers to the maximum marital deduction. D died intestate on May 13, 1985. Held, the formula in the trust is not the type of "formula" contemplated by sec. 403(e)(3), Economic Recovery Tax Act of 1981, Pub. L. 97-34, 95 Stat. 305 (sec. 403(e)(3)). Held, further: Sec. 403(e)(3) does not preclude P from qualifying for an unlimited marital deduction under I.R.C. sec.…
1DissentRuwe, J.
Prior to the enactment of the Economic Recovery Tax Act of 1981 (ERTA), Pub. L. 97-34, 95 Stat. 172, the marital deduction was limited to the greater of $250,000 or one-half of the adjusted gross estate. ERTA removed these dollar limits for decedents dying after December 31, 1981. Congress was aware that many people had executed wills (and trusts), prior to ERTA, containing maximum marital deduction formula clauses with the expectation that bequests pursuant to such formulas would be limited to the greater of $250,000 or one-half of the adjusted gross estate. Because use of the new unlimited…
2Cases cited14 opinions
- Thoburn v. CommissionerUnited States Tax Court · 1990
- Peoples Trust Company Of Bergen County v. United StatesCourt of Appeals for the Third Circuit · 1969
- Liberty National Bank & Trust Company, Estate of Terry H. Fischer, Deceased v. United StatesCourt of Appeals for the Sixth Circuit · 1989
- Estate of Neisen v. CommissionerUnited States Tax Court · 1987
- Estate of Francis L. Bruning, Deceased, Ilse M. Bruning, Personal Representative v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1989
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