Morgens: More QTIP Mischief

4 Pages Posted: 24 Jul 2010

See all articles by Wendy C. Gerzog

Wendy C. Gerzog

University of Baltimore - School of Law

Date Written: July 22, 2010

Abstract

In Morgens, the court ruled in favor of the government that section 2035(b) applied to the gift taxes paid by the qualified terminable interest property (QTIP) trust beneficiaries to gross up the widow’s estate by that amount. Because the surviving (or donee) spouse must be taxed on the underlying property over which she has no ownership rights, Congress enacted section 2207A to allow the second spouse to recover from the beneficiaries of the property the transfer taxes relating to her gift or estate inclusion. However, the court held that section 2207A did not shift the gift tax liability to those beneficiaries to exempt the widow’s estate from the application of section 2035(b).

Keywords: qualified terminable interest property, QTIP, marital deduction, section 2035, section 2207A, Morgens, Mellinger, estate tax, gift tax

JEL Classification: H20, H29, K34, J16

Suggested Citation

Gerzog, Wendy C., Morgens: More QTIP Mischief (July 22, 2010). Tax Notes, Vol. 128, No. 3, 2010. Available at SSRN: https://ssrn.com/abstract=1646976

Wendy C. Gerzog (Contact Author)

University of Baltimore - School of Law ( email )

1420 N. Charles Street
Baltimore, MD 21218
United States
410-837-4522 (Phone)

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