Estate of Daisy F. Christ, Deceased, Robert Johnson Christ v. Commissioner of Internal Revenue

The only issue in these consolidated income and estate tax cases is the value of the interest received by the decedent, Daisy F. Christ, when she elected to take under the will of her deceased husband, Andrew, in 1952. The Tax Court resolved the issue adversely to the taxpayer, 54 T.C. 493 (1970). We affirm.

When her husband died, Mrs. Christ was faced with a choice open to many California widows: whether to take her share of the community property by op eration of-state law, or elect to allow her share of the community property to pass under her husband’s will to a trust under which she would receive income for life with limited rights in the principal of all the property of the community. She elected to take under the trust.

This election created several federal tax consequences. The widow’s surrender of her share of the community property to a trust which will pay her the income from the property for life constitutes a “transfer” under Int.Rev.Code of 1954, § 2036(a)(1). Unless the transfer is a “bona fide sale for an adequate and full consideration in money or money’s worth,” the property is includible in the widow’s gross estate at the time of her death. If the property is…