Ralph H. Davis Evelyn Davis, Personal Representative v. Commissioner of Internal Revenue

Petitioner Evelyn L. Davis, the personal representative of the estate of her late husband, Ralph H. Davis, appeals a Tax Court decision upholding the determination of a deficiency in the taxes paid on the Davis estate. Mrs. Davis claims that the terms of an amended trust included in the Davis estate give her an unrestricted right to all of the trust income for life, and that her interest in the trust income qualifies for a marital deduction pursuant to Internal Revenue Code section 2056(b)(7). We have jurisdiction pursuant to 26 U.S.C. section 7482 (a), and we affirm.

I

On February 24, 1993, decedent Ralph H. Davis executed both a “Will” and a “Declaration of Trust.” The Will bequeathed the residue of the decedent’s estate to his daughters, Carol Tawney Pencke and Mary Martha Bennett. The Declaration of Trust stated that during Ralph H. Davis’s lifetime, “he shall be entitled to all of the net income ... from the trust estate, payable in convenient installments, and he may withdraw such sums as he desires from principal at any time or times.” The Declaration of Trust also named Pencke and Bennett as successor beneficiaries following the death of Ralph H. Davis. If either…