Pearl M. Kennedy v. Commissioner of Internal Revenue

EASTERBROOK, Circuit Judge.

Pearl Kennedy acquired the family farm in two steps. She received a gift of a joint tenancy in 1953 when she and her husband Frank Kennedy acquired the farm. She received the remainder when Frank died in 1978, taking Frank’s share by virtue of the survivorship feature that is part of joint tenancy in Illinois. In 1979 Pearl disclaimed the interest she had acquired by surviving Frank. Under the law of Illinois, Frank’s former interest passed to the Kennedys’ daughter Marsha. The IRS believes that the disclaimer is a taxable gift from Pearl to Marsha. See 26 U.S.C. §§…