Estate of Gerson v. Commissioner

OPINION

COOK, Circuit Judge.

The Estate of Eleanor R. Gerson appeals the United States Tax Court’s decision to assess a tax of $1,144,465 on the proceeds of an irrevocable trust under the generation-skipping transfer (“GST”) tax. The Estate asserts that a grandfather clause protects these assets from taxation, despite a treasury regulation that would lead to a contrary result. Because the Commissioner’s regulation reasonably construes an ambiguous statutory provision, we affirm the Tax Court’s decision.

I

Benjamin Gerson created a revocable trust to benefit his wife, Eleanor Gerson, and made his…