Estate of Mattias Arnold Madsen, Norma v. Madsen v. Commissioner of Internal Revenue

The sole question presented by this appeal is whether the Tax Court erred in holding that the proceeds of a life insurance policy naming the decedent’s wife as beneficiary should be included in the decedent’s estate for tax purposes. The Tax Court’s decision is based upon § 2042(2) of the 1954 Internal Revenue Code which provides that the proceeds of a life insurance policy are included in a decedent’s estate if the decedent had “incidents of ownership” in the policy at the time of death.1 In deciding whether the decedent had any incidents of ownership in the policy, both the terms of the…