Estate of Helen M. Johnson, Deceased, Lolita McNeill Muhm, Independent v. Commissioner of Internal Revenue

RANDALL, Circuit Judge:

The Commissioner of Internal Revenue appeals a decision of the United States Tax Court allowing the deduction of the value of the homestead interest of the surviving spouse from the value of property included in the decedent’s gross estate. Finding that the interest of the surviving spouse created by the Texas homestead law is “by virtue of a statute creating an estate in lieu of dower or curtesy” within the meaning of section 2034 of the Internal Revenue Code (“Code”), I.R.C. § 2034 (1976), we reverse the decision of the Tax Court, 77 T.C. 120, and remand with…