Source: https://case-law.vlex.com/vid/375-u-s-118-606631154
Timestamp: 2020-06-02 12:37:51
Document Index: 610864804

Matched Legal Cases: ['§ 812', '§ 812', '§ 812', '§ 812', '§ 812', '§ 812', '§ 812', '§ 812', '§ 812', '§ 812', '§ 812']

375 U.S. 118 (1963), 54, United States v. Stapf - Federal Cases - Case Law - VLEX 606631154
Citation: 375 U.S. 118, 84 S.Ct. 248, 11 L.Ed.2d 195
Party Name: United States v. Stapf
84 S.Ct. 248, 11 L.Ed.2d 195
1. Since the widow gave up more than she received, the estate is not entitled to any marital deduction under § 812(e) of the Internal Revenue Code of 1939. Pp. 123-129.
2. Since half of the claims against the estate were chargeable to the widow's half of the community property, such claims could not be deducted in full from the decedent's gross estate as "claims against the estate," within the meaning of § 812(b)(3). Pp. 130-133.
3. That portion of the administration expenses which was chargeable to the widow's share of the community property could not be deducted from the value of the estate as "administration expenses" under § 812(b)(2). Pp. 133-134.
4. Even if the testator's assumption of responsibility for his wife's share of the community debts and for her share of administration expenses were treated as marital gifts, rather than as claims or expenses, no marital deduction could be allowed under § 812(e) on account of such gifts, because the widow gave up more than she received. Pp. 134-135.
Respondents brought this suit against the Government in the District Court for the Northern District of Texas for a refund of estate taxes paid pursuant to an asserted deficiency. The Court of Appeals for the Fifth Circuit held that respondents were entitled to certain marital deductions under § 812(e) of the Internal Revenue Code of 19391 and also to deductions for other payments as
"claims against the estate" and "administration expenses" under § 812(b)(3) and (2) of the 1969 Code.2 309 F.2d 592. We granted certiorari to consider questions of statutory interpretation important to the administration of the federal estate tax laws. 372 U.S. 928.
In fact, Mrs. Stapf elected to take under the will. She received, after specific bequests to others, one-third of the combined separate and community property, a devise valued at $106,268,5 which was $5,175 less than she would
have received had she retained her community property and refused to take under the will.6
In computing the net taxable estate, the executors claimed a marital deduction under § 812(e)(1) of the Internal Revenue Code of 1939 for the full value of the one-third of decedent's separate estate ($22,367) which passed to his wife under the will. The executors also claimed a deduction for the entire $32,368 of community debts as "claims against the estate" under § 812(b)(3) and for the entire $4,073 of expenses as "administration expenses" under § 812(b)(2). The Commissioner of Internal Revenue disallowed the marital deduction and the deductions for claims and administration insofar as these represented debts (50%) and expenses (35%) chargeable to the wife's one-half of the community. Respondents then instituted this suit for a tax refund. The District Court allowed the full marital deduction, but disallowed the disputed claims and expenses. 189 F.Supp. 830. On cross-appeals, the Court of Appeals, with one judge dissenting on all issues, held that each of the claimed deductions was allowable in full. 309 F.2d 592. For reasons stated below, we hold that the [84 S.Ct. 253] Commissioner was correct, and that none of the disputed deductions is allowable.7
the value of the interest passing to the wife is the value of the property given her less the value of the property she is required to give another as a condition to receiving it.
(E) Valuation Of interest passing To surviving spouse. In determining for the purposes of subparagraph (A) the value of any interest in property passing to the surviving spouse for which a deduction is allowed by this subsection --
(ii) where such interest or property is incumbered in any manner, or where the surviving spouse incurs any obligation imposed by the decedent with respect to the passing of such interest, such incumbrance or obligation shall be taken into account in the same manner as if the amount of a gift to such spouse of such interest were being determined.
The Court of Appeals, in allowing the claimed marital deduction, reasoned that, since the valuation is to be "as if" a gift were being taxed, the legal analysis should be the same as if a husband had made an inter vivos gift to his wife on the condition that she give something to the children. In such a case, it was stated, the husband is taxable in the full amount for his gift. The detriment incurred by the wife would not ordinarily reduce the amount of the gift taxable to the husband, the original donor.8 The court concluded:
Within gift tax confines, the community property of the widow passing [84 S.Ct. 254] under the will of the husband to others may not be "netted" against the devise to
the widow, and thus testator, were the transfer inter vivos, would be liable for gift taxes on the full value of the devise.
This conclusion, based on the alleged plain meaning of the final gift amount clause of § 812(e)(1)(E)(ii),9 is not supported by a reading of the entire statutory provision. First, § 812(e) allows a marital deduction only for the decedent's gifts or bequests which pass "to his surviving spouse." In the present case, the effect of the devise was not to distribute wealth to the surviving spouse, but instead to transmit, through the widow, a gift to the couple's children. The "gift to the surviving spouse" terminology...
558 F.2d 443 (8th Cir. 1977), 76-1925, Macbride v. Exon