Estate of Edward A. Cunha, Deceased, Bank of America, National Trust and Savings Association v. Commissioner of Internal Revenue

Edward A. Cunha, a resident of San Mateo County, California died testate on August 6, 1954, leaving surviving him his widow, Helen V. Cunha, and a son. Thereafter petitioner was duly appointed executor of the estate and in due course petitioned the court in which the probate proceedings were pending for an allowance for the widow’s support until administration would be completed. Said court, pursuant to section 680 of the California Probate Code, entered an order granting Helen V. Cunha a “family allowance” of $600 a month, which amount it subsequently increased to $900. A total of $10,500 was paid pursuant to said order. The executors filed federal estate tax returns on behalf of said estate in which they claimed a deduction of the full $10,500 allowance paid the widow as a marital deduction under section 812(e) of the Internal Revenue Code of 1939. Sixty per cent of said deduction was subsequently disallowed by the Commissioner of Internal Revenue on the ground that the right to a widow’s allowance under California law terminates upon the death or remarriage of the widow and, hence, it comes within the “terminable interest” limitation of section 812(e) (1) (B). Forty per cent of…