Bank of America National Trust and Savings Association, as for the Last Will and Testameny of Thomas McDonough Deceased v. United States

This was an action for the recovery of estate taxes levied and collected from the plaintiff “appellant with respect to the estate of Thomas McDonough. Thomas McDonough died September 13, 1948, just 14 months and 8 days after the death of his brother Peter. He succeeded, by right of survivorship, to property held by himself and Peter as joint tenants. This circumstance required the application of subdivision (c) of § 812 of the Revenue Code of 1939, 26 U.S.C.A. § 812 (c), headed “Property previously taxed”, and authorizes a deduction from the gross estate for property previously taxed as a part of the estate of a previous decedent, when such property was acquired by bequest, devise or inheritance, (including survivorship of a joint tenant) from a decedent who died within five years prior to the later decedent’s death. The dispute we must settle relates to the manner in which the value of this “property previously taxed” should be ascertained.

The facts of the ease are set forth in the decision of the district court, reported at 130 F.Supp. 923 . They present an unusual and comparatively rare situation. This is unlike the ordinary case in which the prior estate completely…