Palumbo and the Estate Tax Charitable Deduction

Abstract

This Estate and Gift Tax Rap column for Tax Notes is an extended discussion of the United States District Court (W.D. Pa.) decision in Estate of Palumbo v. U.S.. In that case, the court upheld a claimed estate tax charitable deduction for amounts passing to charity pursuant to a settlement of a will contest. The court cited legislative history, case law precedent respecting arm’s-length settlements as the equivalent of will transfers, and the strength of the the charitable legatee’s claim against the estate.

Keywords: will, estate, estate tax, charity, charitable deduction, will contest, settlement, deduction, Palumbo

JEL Classification: K34