§2044 — Certain property for which marital deduction was previously allowed

Respondent argues that decedent's situation is distinguishable from Propstra because all of the property to be aggregated in this case is included in decedent's estate. The FOH shares in the Harriett trust are included pursuant to section 2033, and FOH shares in the QTIP trust are included pursuant to section 2044.

Specifically, section 2044 requires that, upon the surviving spouse’s death, the value of her gross estate include the value of any QTIP.11 And as a corollary, section 2519 addresses dispositions of a qualifying income interest for life in any QTIP during the surviving spouse’s lifetime, triggering potential gift tax in certain circu

The parties having settled all other issues, this case is before the Court on Cross-Motions for Partial Summary Judgment as to (1) whether the value of the SK Trust assets included in the value of the gross estate pursuant to section 2044 is properly reduced by the agreed- upon undistributed income amount and (2) whether the estate is entitled to deduct any part of the agreed-upon settlement payment as administration expenses pursuant to section 2053.1 Except as relates to respondent’s concessio

We hold that that estate is required under section 2044 to include in the value ofthat gross estate $607,927.51, the value on the applicable valuation date ofonly certain ofthe as- sets that that trust held on the date ofMr.

- 23 - After the death ofthe surviving spouse, section 2044 requires that the value ofhis or her gross estate include the value ofQTIP.

Accordingly, decedent's-gross estate is increased by $533,225 pursuant to section 2044 : 'The value of account No .

For example, section 2044 provides that for purposes of the estate and generation-skipping tax chapters of the Code, the QTIP includable in the gross estate of the surviving spouse shall be treated as property passing from the surviving spouse .

Finally, the Commissioner argues that section 2044 requires Thelma's estate to include the value of the property identified on Gary's estate tax return as a QTIP deduction.

2044 provides as follows: SEC.

The value of QTIP is included in a surviving spouse’s estate pursuant to section 2044(a). In the legislative history accompanying the enactment of sections 2044 and 2056(b)(7), the House Ways and Means Committee noted that prior to the enactment of sections 2044 and 2056(b)(7) “the marital deduction [was] available only with respect to property passing outright to the spouse or in specified forms which [gave] the spouse control over the transferred property”. H. Rept. 97-201 at 159-160 (1981), 1

Commissioner, supra at 35-36, we reasoned that although section 2044 required that property held by the QTIP trust be included in Harriett’s (i.e., the surviving spouse’s) gross estate, the property “[did] not actually pass to or from” her, and that she “at no time” possessed “control” or had “any power of disposition over” the property.

After concessions by the parties, the issues remaining for decision are: (1) Whether section 2044 requires aggregation, for valuation purposes, of the stock held in a trust established by decedent’s predeceased spouse under section 2056(b)(7) with stock held in decedent’s revocable trust and with stock held outright by decedent; and (2) if section 2044 does not require aggregation, the fair market value of the stock at decedent’s d

copy of which is attached hereto, the executor did not elect to treat the Item Two trust as qualified terminable interest property. Consequently, the assets held in the item two trust are not includible in the gross estate of Mildred G. Letts under section 2044. James P. Letts III and JoAnne L. Magbee signed decedent’s Federal estate tax return. It was filed on April 20, 1992. Respondent determined that the value of the item II trust is includable in decedent’s gross estate. Petitioner concedes

After the death of the surviving spouse, section 2044 requires that the value of his or her gross estate include the value of QTIP.

Black's gross estate under section 2044, whether the marital trust that Mr.

Black's gross estate under section 2044, whether the marital trust that Mr.

The estate of the surviving spouse may recover from QTIP recipients the amount by which the surviving spouse’s estate tax is increased by the inclusion of the QTIP in the estate. Sec. 2207A(a). As a corollary to section 2044, section 2519 addresses dispositions of QTIP during the surviving spouse’s lifetime and treats any disposition of

of the assets owned by any of the Five Partnerships is includible in Ms. Stone’s gross estate under section 2036(a)(1). The second issue is whether certain assets owned by one of the Five Partnerships is includible in Ms. Stone’s gross estate under section 2044. We hold that none of the assets owned by that partnership is includible in Ms. Stone’s gross estate under section 2044. FINDINGS OF FACT Many of the facts have been stipulated and are so found 1Unless otherwise indicated, all section re

of the assets owned by any of the Five Partnerships is includible in Ms. Stone’s gross estate under section 2036(a)(1). The second issue is whether certain assets owned by one of the Five Partnerships is includible in Ms. Stone’s gross estate under section 2044. We hold that none of the assets owned by that partnership is includible in Ms. Stone’s gross estate under section 2044. FINDINGS OF FACT Many of the facts have been stipulated and are so found 1Unless otherwise indicated, all section re

e date-of-death value of a 25-percent interest in C&L Bailey that was held in a - 2 - qualified terminable interest property (QTIP) trust established by decedent’s predeceased first wife and that is includable in decedent’s gross estate pursuant to section 2044; (3) the amount, if any, of net taxable gifts arising with respect to the 1995 assignment to decedent’s children of a promissory note; (4) the amount, if any, of decedent’s unreported taxable gifts in 1993 and 1989; and (5) the amount ded

The issues for decision are: (1) Whether certain partnership interests - 2 - includable in the gross estate pursuant to section 2044 should be merged or aggregated with the partnership interests includable in the gross estate pursuant to section 2038, for valuation purposes; and (2) whether the interests in two partnerships passing at death should be valued for Federal estate tax purposes as "assignee" interests or as partnership interests.

Section 2044 includes in the gross estate the value of all property in which the decedent had a qualified income interest for life and for which a deduction was allowed to the estate of a predeceased spouse under section 2056(b)(7) (QTIP). Upon the death of the second spouse, the QTIP is taxed as part of the second spouse's estate. See sec. 2044(c)

See §§ 2044, 2519; Estate of Sommers v. Commissioner, 149 T.C. 209, 223 (2017). Three requirements must be met for a terminable interest property to qualify as QTIP: (1) the property must pass from the decedent, (2) the surviving spouse must have a qualifying income interest in the property for life, and (3) the executor of the estate of the first spous

26, 36–37 (1999) (“Neither section 2044 nor the legislative history indicates that decedent should be treated as the owner of QTIP property for [purposes of aggregating stock ownership in connection with valuing the stock].”).

Alternatively, ifthe surviving spouse disposes ofall or part ofa qualifying income interest for life, - 34 - [*34] section 2519 treats the disposition as a transfer ofall interest in QTIP other than the qualifying income interest.33 Although section 2519 does not define a "disposition", section 25.2519-1(f), Gift Tax Regs., provides tha

Elkins' marital trust includable in decedent's gross estate under section 2044) shall be charged against his residuary estate.

Alternatively, ifthe surviving spouse disposes ofall or part ofa qualifying income interest for life, - 34 - [*34] section 2519 treats the disposition as a transfer ofall interest in QTIP other than the qualifying income interest.33 Although section 2519 does not define a "disposition", section 25.2519-1(f), Gift Tax Regs., provides tha

Elkins’ marital trust includable in decedent’s gross estate under section 2044) shall be charged against his residuary estate.

For Federal estate tax purposes, under section 2044 decedent's estate is required t include in her gross estate the fair market value of the LRC and LSC stock owned by the trust .

By contrast, the Internal Revenue Code contains no specific provision (apart from the general rule of sec. 2041(a)(2), which brings into the gross estate property with respect to which the decedent has a general power of appointment) requiring property transferred pursuant to sec. 2056(b)(5) to be included in the spouse’s gross estate. 1

h is includible in my estate for the purpose of determining such tax, including, but not limited to, any tax on property includible under section 2041 (relating to life insurance proceeds), section 2042 - 5 - (relating to powers of appointment), or section 2044 (relating to qualified terminable interest property) of the Internal Revenue Code, or any comparable provision of state law, but excluding, however, any tax imposed by section 2032A(c) (relating to qualified real property) or chapter 13 (

Section 2044 includes in the gross estate the value of all qualified terminable interest property (QTIP); i.e., property in which the decedent had a qualifying income interest for life and for which a deduction was allowed to the estate of a predeceased spouse under section 2056(b)(7). Upon the death of the second spouse, the QTIP is taxed as part

Section 2044, in turn, expressly provides that the value of any property for which a deduction was taken under section 2056(b)(7) is included in the surviving spouse’s gross estate. Consequently, a surviving spouse cannot, by means of a testamentary power of appointment over a QTIP trust, direct beneficial enjoyment of the trust property in a trans

he was the chairman of the board on February 1, 1993. He retired in 1994. - 3 - 2. Ownership Green Light is a closely held corporation. Of the 460 outstanding shares of stock in Green Light, 184 shares were included in decedent’s gross estate under section 2044. Decedent’s children owned the remaining shares of Green Light stock when she died. Green Light has never paid dividends. 3. Products and Operations Green Light formulates and markets (but does not manufacture) insecticides, weed killers,