(a) General rule. A deduction is allowed under section 2055(a) from
the gross estate of a decedent who was a citizen or resident of the
United States at the time of his death for the value of property
included in the decedent's gross estate and transferred by the decedent
during his lifetime or by will--
(1) To or for the use of the United States, any State, Territory,
any political subdivision thereof, or the District of Columbia, for
exclusively public purposes;
(2) To or for the use of any corporation or association organized
and operated exclusively for religious, charitable, scientific,
literary, or educational purposes (including the encouragement of art
and for the prevention of cruelty to children or animals), if no part of
the net earnings of the corporation or association inures to the benefit
of any private stockholder or individual (other than as a legitimate
object of such purposes), if the organization is not disqualified for
tax exemption under section 501(c)(3) by reason of attempting to
influence legislation, and if, in the case of transfers made after
December 31, 1969, it does not participate in, or intervene in
(including the publishing or distributing of statements), any political
campaign on behalf of or in opposition to any candidate for public
office.
(3) To a trustee or trustees, or a fraternal society, order, or
association operating under the lodge system, if the transferred
property is to be used exclusively for religious, charitable,
scientific, literary, or educational purposes (or for the prevention of
cruelty to children or animals), if no substantial part of the
activities of such transferree is carrying on propaganda, or otherwise
attempting, to influence legislation, and if, in the case of transfers
made after December 31, 1969, such transferee does not participate in,
or intervene in (including the publishing or distributing of
statements), any political campaign on behalf of any candidate for
public office; or
(4) To or for the use of any veterans' organization incorporated by
act of Congress, or of any of its departments, local chapters, or posts,
no part of the net earnings of which inures to the benefit of any
private shareholder or individual.
The deduction is not limited, in the case of estates of citizens or
residents of the United States, to transfers to domestic corporations or
associations, or to trustees for use within the United States. Nor is
the deduction subject to percentage limitations such as are applicable
to the charitable deduction under the income tax. An organization will
not be considered to meet the requirements of subparagraph (2) or (3) of
this paragraph if such organization engages in any activity which would
cause it to be classified as an "action" organization under paragraph
(c)(3) of Sec. 1.501(c)(3)-1 of this chapter (Income Tax Regulations).
See Secs. 20.2055-4 and 20.2055-5 for rules relating to the disallowance
of deductions to trusts and organizations which engage in certain
prohibited transactions or whose governing instruments do not contain
certain specified requirements.
(b) Powers of appointment--
(1) General rule. A deduction is allowable under section 2055(b) for the value of property passing to or
for the use of a transferee described in paragraph (a) of this section
by the exercise, failure to exercise, release or lapse of a power of
appointment by reason of which the property is includible in the
decedent's gross estate under section 2041.
(2) Certain bequests subject to power of appointment. For the
allowance of a deduction in the case of a bequest in trust where the
decedent's surviving spouse (i) was over 80 years of age at the date of
decedent's death, (ii) was entitled for life to all of the net income
from the trust, and (iii) had a power of appointment over the corpus of
the trust exercisable by will in favor of, among others, a charitable
organization, see section 2055(b)(2). See also section 6503(e) for
suspension of the period of limitations for assessment or collection of
any deficiency attributable to the allowance of the deduction.
(c) Submission of evidence. In establishing the right of the estate
to the deduction authorized by section 2055, the executor should submit
the following with the return:
(1) A copy of any instrument in writing by which the decedent made a
transfer of property in his lifetime the value of which is required by
statute to be included in his gross estate, for which a deduction under
section 2055 is claimed. If the instrument is of record the copy should
be certified, and if not of record, the copy should be verified.
(2) A written statement by the executor containing a declaration
that it is made under penalties of perjury and stating whether any
action has been instituted to construe or to contest the decedent's will
or any provision thereof affecting the charitable deduction claimed and
whether, according to his information and belief, any such action is
designed or contemplated.
The executor shall also submit such other documents or evidence as may
be requested by the district director.
(1) See section 2055(f) for certain cross references relating to section 2055.
(2) For treatment of bequests accepted by the Secretary of State or
the Secretary of Commerce, for the purpose of organizing and holding an
international conference to negotiate a Patent Corporation Treaty, as
bequests to or for the use of the United States, see section 3 of Joint
Resolution of December 24, 1969 (Pub. L. 91-160, 83 Stat. 443).
(3) For treatment of bequests accepted by the Secretary of the
Department of Housing and Urban Development, for the purpose of aiding
or facilitating the work of the Department, as bequests to or for the
use of the United States, see section 7(k) of the Department of Housing
and Urban Development Act (42 U.S.C. 3535), as added by section 905 of
Pub. L. 91-609 (84 Stat. 1809).
(4) For treatment of certain property accepted by the Chairman of
the Administrative Conference of the United States, for the purposes of
aiding and facilitating the work of the Conference, as a devise or
bequest to the United States, see 5 U.S.C. 575(c)(12), as added by
section 1(b) of the Act of October 21, 1972 (Pub. L. 92-526, 86 Stat.
1048).
(5) For treatment of the Board for International Broadcasting as a
corporation described in section 2055(a)(2), see section 7 of the Board
for International Broadcasting Act of 1973 (Pub. L. 93-129, 87 Stat.
459).
[Aug. 31, 1990]
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