IRS no longer requires date of death value of testamentary transfer to be reduced by postdeath interest on deferred federal estate tax payable from that transfer.

• Author: Josephs, Stuart R.
• Position: Brief Article

Old IRS position

The IRS previously held that post-death interest accruing on deferred Federal estate tax payable from a testamentary transfer reduces the date-of-death value of that transfer. Therefore, the Service required a reduction for this interest in the following estate tax deductions and credits: * Marital deduction (Rev. Rul. 80-159). * Charitable bequests (Rev. Ruls. 82-6 and 73-98). * Credit for estate tax on prior transfers (Rev. Rul. 66-233).

Recent developments

These rulings have not been followed by the Tax Court in Est. of Richardson, 89 TC 1193 (1987), and the Sixth and Seventh Circuits in Est. of Street (1992) and Est. of Whittle (1993), respectively.

New IRS position

The Service now agrees with these judicial decisions...