Letter Ruling 200316008 (December 31, 2002)

AuthorSeymour Goldberg
ProfessionSenior partner in the law firm of Goldberg & Goldberg, P.C., Woodbury, New York
(DECEMBER31, 2002)
(Selected portions of the ruling are provided below)
This ruling involves the ability of a surviving spouse (Wife) to
obtain a deduction under Sec. 691(c) of the Internal Revenue Code
for IRA distributions received by her.
According to the facts, the Wife survived the deceased IRA owner.
The deceased IRA owner maintained two IRAs, IRA number 1 and
IRA number 2. The beneficiary of IRA number 1 was Trust 1. The
beneficiary of IRA number 2 was Trust 2. IRA number 1 and IRA
number 2 were included in the decedent’s gross estate.
The decedent’s Wife exercised her personal right of election to re-
ceive her elective share pursuant to the laws of the State. Under the
State’s elective share statute, the Wife was entitled to receive one-
third of the estate (after certain expenses but before taxes). The
State law permits distributions in kind to satisfy an elective share.
Under an agreement approved by the probate court, the wife’s
elective share was to be funded with V dollars from IRA number 1,
W dollars from IRA number 2, and X dollars in other assets (non-
IRD assets). As a partial payment of her elective share, IRA number
2 paid Y dollars to Trust 2 in Year L. In Year L, the Wife received
Y dollars from Trust 2. The Wife died in Year M.
The receipt of Y dollars was reported as gross income to the Wife
in Year L. For the taxable Year L, no deduction under Sec. 691(c)
was taken on the Wife’s income tax return. The Wife’s estate will
receive the Wife’s share of the decedent’s estate that was not paid
to the Wife prior to the Wife’s death.

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