Farrell v. United States
Decision Date | 11 October 1961 |
Docket Number | No. 421-61.,421-61. |
Citation | 198 F. Supp. 461 |
Court | U.S. District Court — Southern District of California |
Parties | Anna FARRELL, Plaintiff, v. UNITED STATES of America, Defendant. |
Harold E. Prudhon, Los Angeles, Cal., for plaintiff.
Francis C. Whelan, U. S. Atty., Robert H. Wyshak, Asst. U. S. Atty., Chief, Tax Division, Lillian W. Wyshak, Asst. U. S. Atty., Los Angeles, Cal., for defendants.
The above entitled cause heretofore tried, argued and submitted is now decided as follows:
Upon the grounds stated in the Comment to follow, judgment will be for the defendant that the plaintiff take nothing by her action.
Costs to the Government.
In this action the plaintiff seeks to recover $9,357.76 federal estate taxes alleged to have been collected wrongfully. The question is whether the plaintiff was entitled to the marital deduction authorized by § 2056(b) of the Internal Revenue Code of 1954. (26 U.S.C.A. § 2056 (b).)
The last will and testament of the plaintiff's husband contained the following paragraphs:
The law on the subject was succinctly stated by the late Judge Ernest A. Tolin in Roberts v. United States, D.C.1960, 182 F.Supp. 957, 958:
"If the wife's interest was conditioned upon her surviving distribution of her husband's estate, the interest was terminable and the marital deduction should be disallowed." 182 F.Supp. at page 958.
This is a correct interpretation of § 812 (e) of the Internal Revenue Code of 1939, which was identical, in the main, with § 2056(b) of the Internal Revenue Code of 1954. (26 U.S.C.A. § 2056(b).)
While in the case before Judge Tolin he construed the will as devising a vested interest, the clauses in the will before us are so correlated that Clauses Four and Five are as effective in limiting the estate granted by Clause Three as if they were contained in the same Clause. See, California Trust Company v. Riddell, D.C. Cal.1955, 136 F.Supp. 7; Estate of Allen Clyde Street, 1955, 25 T.C. 673; Kasper v. Kellar, 8 Cir., 1954, 217 F.2d 744, 746-748; Estate of Edward A. Cunha v. Commissioner of Internal Revenue, 9 Cir., 1960, 279 F.2d 292, 296-298; Estate of Sbicca, 1960, 35 T.C. 96.
The contrary contention of the plaintiff that because the vesting Clause, Third, is separate and apart from the modifying Clauses, Fourth and Fifth, lacks reality. The determining factor is whether the modifying clauses so distinctly alter the vesting clause that they cannot be separated. Such was the situation in Estate of Allen Clyde Street, supra. There the vesting clauses read:
does not entitle the widow to a marital deduction.
Hence the ruling above made.
The Findings and Judgment containing additional facts are attached as Appendix "A".
Appendix "A"
Findings of Fact
The Court has jurisdiction of the parties and of this action pursuant to § 1346 (a) (1) of Title 28 of United States Code.
Plaintiff, Anna Farrell, is a citizen of the United States and resides within the Southern District of California.
Harold E. Prudhon at all pertinent times was the duly qualified and acting executor of the Estate of Thomas S. Farrell who died on August 23, 1956, while a resident of the County of Los Angeles, State of California.
The Will of Thomas S. Farrell provided as follows:
On April 3, 1957, Harold E. Prudhon, as such executor, filed his estate tax return in the office of the District Director of Internal Revenue at Los Angeles, California, said return showing a total gross estate of $184,170.82; that therewith and on said date the said plaintiff paid to the defendant, United States of America, the sum of $2,264.03 as a tentative estate tax in said matter.
On or about June 7, 1957, an order for distribution for the entire estate of said Thomas S. Farrell was made, pursuant to which the estate was distributed to the plaintiff.
On or about May 21, 1959, the said plaintiff as transferee and distributee of the estate of Thomas S. Farrell paid to the said defendant, United States of America, an additional $9,357.76, consisting of $8,585.10 estate tax and $772.66 interest.
At the time of filing the said estate tax return, the plaintiff claimed therein a marital deduction in the amount of $94,532.85, which marital deduction was disallowed by the defendant.
Under the provisions of the decedent's will the bequest of all of decedent's property to Anna Farrell, his...
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