Source: https://law.justia.com/cases/federal/appellate-courts/F2/683/1219/74965/
Timestamp: 2019-09-15 10:10:59
Document Index: 262339037

Matched Legal Cases: ['§ 2056', '§ 2056', '§ 2056', 'art 2', '§ 2056', '§ 2056', '§ 2056', '§ 2056', '§ 2056', 'art 2']

Edna Ricards, Plaintiff-appellant, v. United States of America, Defendant-appellee, 683 F.2d 1219 (9th Cir. 1981) :: Justia
Edna Ricards, Plaintiff-appellant, v. United States of America, Defendant-appellee, 683 F.2d 1219 (9th Cir. 1981)
U.S. Court of Appeals for the Ninth Circuit - 683 F.2d 1219 (9th Cir. 1981)
Argued and Submitted Feb. 9, 1981. Decided Aug. 7, 1981. As Amended Nov. 27, 1981
First, appellant's interpretation of § 2056 would create a substantial gap in Congress' scheme to equalize the estate tax burden on taxpayers in community property and non-community property states. Were we to uphold appellant's position, taxpayers with community property interests could circumvent the congressional scheme simply by exchanging their community property for separate property in non-community property states. We cannot judicially create such a substantial exception to § 2056, particularly in light of the Congress' clearly expressed intent to treat any transformation of community property into separate property as a "conversion" within the meaning of § 2056. See S.Rep. 1013 (Part 2) at 21. See generally Muniz v. Hoffman, 422 U.S. 454, 469, 95 S. Ct. 2178, 2187, 45 L. Ed. 2d 319 (1975); Tidewater Oil Company v. United States, 409 U.S. 151, 167-68, 93 S. Ct. 408, 418, 34 L. Ed. 2d 375 (1972).
Secondly, appellant's interpretation is at odds with certain revenue rulings dealing with § 2056. These revenue rulings, while not dispositive, are nevertheless entitled to consideration in our assessment of whether separate property acquired in a common law state with community property assets is "converted" community property for purposes of § 2056.12 Under Revenue Ruling 78-391, separate property purchased in a common law state with the proceeds from the sale of community property in a community property state should be deemed to be "converted" community property, even though the laws of the common-law state regard the property as separate property.13 Similarly, Revenue Ruling 68-80 holds that community property which is exchanged for property in a common law state is considered "converted" community property for purposes of § 2056.14 See also Revenue Ruling 67-171, 1967-1 C.B. 274 (1967). These revenue rulings thus also contradict appellant's argument that only "conversions" of community property occurring within the community property system are within the purview of § 2056(c) (2) (C).15
See I.R.C. § 2056(c) (2); S.Rep. 1013 (Part 2) at 19-21. Technically, this "ineligibility" is accomplished by requiring that the entire value of any community property held by decedent at the time of his or her death be subtracted from the decedent's gross estate. The marital deduction is then computed on the basis of the value of any other interest in property passing to the surviving spouse. See generally Surrey, Federal Taxation of the Family-The Revenue Act of 1948, 61 Harv. L. Rev. 1097, 1122-25 (1948)
A revenue ruling, as distinguished from a regulation or Treasury decision, does not have the force and effect of law. See Idaho Power Co. v. Commissioner, 477 F.2d 688, 696 n.10 (9th Cir. 1973), rev'd on other grounds, 418 U.S. 1, 94 S. Ct. 2757, 41 L. Ed. 2d 535 (1974); Merchants Indus. Bank v. Commissioner, 475 F.2d 1063, 1064 (10th Cir. 1973). Nevertheless, they do constitute a body of experience and informed judgment to which courts may properly resort for guidance in the interpretation of relevant revenue statutes and regulations. See St. Louis Bank for Cooperatives v. United States, 624 F.2d 1041, 1050 (Ct. Cl. 1980); Groves v. United States, 533 F.2d 1376, 1380 (5th Cir. 1976), cert. denied, 429 U.S. 1000, 97 S. Ct. 529, 50 L. Ed. 2d 611 (1976); see generally United States v. Jefferson County Bd. of Educ., 372 F.2d 836, 858 (5th Cir. 1966), cert. denied, 389 U.S. 840, 88 S. Ct. 67, 19 L. Ed. 2d 103 (1967)