Taxation – Federal Estate Tax – Incidence of Tax Determined by Testamentary Directive
An inter vivas trust created by testator and property held jointly with his wife were included in his gross estate in computing the federal estate tax.1Testator left his residuary estate to charity and directed in his will that the estate tax on the above inter vivas transfers be borne by the property so transferred. The government determined that the estate tax was payable out of the residue and reduced the charitable deduction by the amount of the estate tax attributable to the inter vivas transfers pursuant to section 812(d) of the 1939 Internal Revenue Code. The district court granted the executor a refund, deciding that the tax on the inter vivas transfers was payable out of that property as the testator directed. On appeal, held, affirmed. Under Minnesota law the estate tax falls on the residue unless the testator, as here, indicates it is to fall on other property. United States v. Goodson, (8th Cir. 1958) 253 F. (2d) 900.