Show Me the Money
The Surprising Complexity of Cash Bequests
March 2026
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This article reviews the often neglected and surprisingly complex considerations related to cash bequests. These widely used gifts present both estate law and tax uncertainties that can be managed with more descriptive drafting.
Many clients like including cash bequests in their estate plans. Intended recipients often are extended family members, close—typically long-term—friends, caregivers, or beloved charities. Residual takers, by contrast, are commonly immediate family members.
Even though cash bequests are widely used, the underlying estate law and tax considerations are surprisingly complex. The donative intent can be expressed simply—for example, “I want to give away some cash to a few special people.” But the legal consequences of this transfer are often unclear.
This article describes the estate law and tax law complexities associated with cash bequests. By understanding the issues, estate planners can better inform clients of the inherent uncertainties and alternative legal positions.
Estate Law Issues
The estate law uncertainties are unique to cash bequests. Two key estate law issues are whether a bequest could be subject to ademption or abatement and in what circumstances interest could accrue on a cash bequest.
“General Legacy” Characterization and Its Effects
A typical cash bequest might look like this:
I give my sister, Susan Smith, the sum of Twenty-Five Thousand Dollars ($25,000), if she survives me.
This clause would traditionally be characterized as providing a “general devise” or “general legacy.”1 A general devise is payable out of the probate estate’s available assets.
A specific devise is different. With a specific devise, such as a real estate property bequest, the decedent does not intend for the designated asset to be paid out of the estate generally. Instead, the gift is to be paid solely by delivering the specific item to the beneficiary, rather than by providing a designated asset value, quantity, or the like.2 “Set-aside,” or specific devise, treatment is widely understood with respect to real estate. Cash gifts, on the other hand, are treated differently, as cash is generally regarded as fungible.
Correctly characterizing a cash bequest is essential in applying the separate probate law concepts of ademption and abatement.3 These old, disruptive law principles existed under the common law and have been largely replaced by modern codifications.4 These venerable concepts are, however, default law concepts. Decedents can override these consequences by adequately setting forth descriptive donative intent in the dispositive instrument.
Ademption occurs when a specifically devised asset or item no longer exists at the decedent’s death.5 The separate concept of abatement6 can apply to a specific or general devise under a prescribed statutory ordering rule and occurs when there are insufficient assets to otherwise meet the statutory family allowance, administrative expenses, or claims against an estate.
Characterization of cash bequests was recently addressed in a Michigan case. In In re Barbara A. Young Living Trust,7 the Michigan Court of Appeals reviewed a trial court’s ruling that cash bequests constituted “specific bequests” and thus were not subject to ademption. Ademption treatment was asserted by the residual takers after they discovered the decedent had spent all of her cash during her lifetime.
The Michigan Court of Appeals disagreed with the trial court’s specific bequest characterization and held that the cash bequests constituted general legacies.8 But the appellate court nevertheless refused to impose Michigan’s statutory ademption scheme.9
The court turned its focus to the conveyance instruments and examined the terms used to express the cash bequests. Under the court’s view, the use of unique conveyance terms, as opposed to a general description that merely referenced a source from where the asset would be funded, supported the conclusion that the cash bequests were specific in amount.10 With this finding, the residual taker’s ademption relief request was denied.11
As the Michigan case illustrates, ademption claims can be fodder for estate disputes. Intent-focused drafting can be useful in limiting unnecessary disputes.
When Should the Cash Gift Be Made?
Statutory and case law confers discretion to personal representatives (PRs) regarding the timing of cash distributions. But once legitimate impediments are cleared (e.g., the creditor claim periods have expired), PRs are under a positive obligation to make timely designated cash and property distributions.
Following the Uniform Probate Code (UPC), Colorado’s Probate Code specifies that a “personal representative shall proceed expeditiously with the settlement and distribution of a decedent’s estate . . . .”12 Many estate instruments embrace this approach, describing that distributions should be made “as soon as practicable.”
Consistent with the UPC,13 Colorado’s Probate Code added teeth to this precept, requiring the payment of interest to pecuniary devisees who do not receive their interests within one year after the PR’s appointment. Specifically, CRS § 15-12-904 states that “[g]eneral pecuniary devises bear interest at the legal rate beginning one year after the first appointment of a personal representative until payment, unless a contrary intent is indicated by the will.”
Colorado law is consistent with other state laws that have adopted the UPC or UPC-derived state laws. But Colorado has set statutory interest high—at the premium rate of 8% per annum, compounded annually.14
Most every state adheres to the general principle that pecuniary bequests should be timely distributed and, if not done timely, interest shall be paid out of the estate.15 The concept is ancient; it has been the law of England for centuries.16 This long-standing rule of construction provides that the unconditional gift of a pecuniary legacy is a gift of both principal and interest and the interest is given not as a penalty for the executor’s negligence but as an incident and accretion to the legacy itself.17 It is generally accepted that general pecuniary legacies draw interest from the time they are due and payable regardless of the circumstances.
The old common law rule regarding interest was founded upon presumed intent. The rule presumed that a testator would desire to award this additional amount. The Connecticut Supreme Court described the presumed rationale:
If the rule does give an advantage to the general legatee at the expense of the residuary legatees, that is merely to prefer the person whom the testator, by the express gift to him, presumably would desire to receive first consideration.18
But how far does this presumption carry? What if the cash bequest is delayed due to a will contest, a creditor claim, or other litigation uncertainties that delay settlement of the estate?
Although not all state courts agree, the majority view is that the right to receive interest is an incident to the legacy itself and “one bequeathed a money legacy is in the same position as a creditor and is therefore entitled to interest for the time he is denied payment.”19 Thus, unless the will provides otherwise, a general legacy begins to draw interest one year from the PR’s appointment regardless of the pendency of a contest delaying settlement of an estate.20
Given the possibilities of large interest accruals, a PR could consider making the cash bequest timely while, in appropriate circumstances, requesting refunding commitments in carefully tailored documentation. Each estate situation, however, is unique. Careful professional judgment is warranted, and the rationale for such action should be documented, with judicial confirmation secured in appropriate cases.
Interest Accrual on Cash Bequests Contained in Revocable Trust Agreements
How does this statutory interest mandate apply to cash bequests contained in revocable trusts? The Colorado statute referenced above is found in the Colorado Probate Code. No corresponding provision can be found in the Colorado Uniform Trust Code.
With Colorado’s unique adoption of the Uniform Fiduciary Income and Principal Act in 2021, it is not clear that the statutory interest mandate extends to cash bequests contained in a revocable trust instrument. This ambiguity, of course, can depend upon whether the trust agreement adopts Colorado law as the trust’s choice of substantive law.
The underlying uncertainty flows from Colorado’s statutory enactments. Prior to 2021, a separate Colorado statute extended interest accruals to cash bequests made in revocable trust instruments. This statute was not contained in the Colorado Uniform Trust Code but rather in Colorado’s Uniform Principal and Income Act.21 Section 406 of this Act provided:
A fiduciary shall distribute to a beneficiary who receives a pecuniary amount outright the interest or any other amount provided by the will, the terms of the trust, or applicable law from net income determined under paragraph (b) of this subsection (1) or from principal to the extent that the net income is insufficient. If a beneficiary is to receive a pecuniary amount outright from a trust after an income interest ends and no interest or other amount is provided by the terms of the trust or applicable law, the fiduciary shall distribute the interest or other amount to which the beneficiary would be entitled under applicable law if the pecuniary amount were required to be paid under a will.22
Colorado’s Uniform Principal and Income Act was adopted from the 1997 version of the Uniform Law Commission’s Uniform Principal and Income Act (1997 UPIA). In its official comments, the UPIA national drafting committee explained:
Many states have no applicable law that provides for interest or some other amount to be paid on an outright pecuniary gift under an inter vivos trust; this section provides that . . . the interest or amount to be paid shall be the same as the interest or other amount required to be paid on testamentary pecuniary gifts. This provision is intended to accord gifts under inter vivos instruments the same treatment as testamentary gifts.23
On May 17, 2021, however, Governor Polis signed Senate Bill 21-171, Colorado’s Uniform Fiduciary Income and Principal Act,24 which repealed Colorado’s Uniform Principal and Income Act. This 2021 Act contains provisions mirroring the 1997 UPIA.25 But Colorado’s 2021 enactment “reserved” adoption of the second sentence of section 601(d) of the 1997 UPIA.
Colorado, thus, neglected to readopt the statutory rule mandating that “the fiduciary shall distribute the interests or other amount to which the beneficiary would be entitled to under applicable law if the pecuniary amount were required to be paid under a will.” This legislative action creates uncertainty regarding the statutory rule for interest accrual on cash bequests made in a trust agreement. This uncertainty can be resolved through drafting to foreclose or extend interest accruals.
Income Tax Law Issues
Complexity and uncertainty also exist in the application of the income tax statutes. This section reviews the uncertainty in the Internal Revenue Code, case law, and agency guidance regarding the income tax treatment of cash bequests and the interest that may accrue on such bequests.
Are Cash Bequests Includable in Gross Income?
IRC § 61(a) provides that gross income means all income from whatever source derived. This broad general rule, however, yields to specific income tax exemptions applicable to wealth transfers.
The wealth transfer income tax exemption is found in IRC § 102(a), which provides that gross income does not include the value of property acquired by gift, bequest, devise, or inheritance. Both cash and in-kind gifts can qualify for this exemption.
Disputes have arisen regarding the proper scope of this income tax exemption. In the famous case of Lyeth v. Hoey,26 the US Supreme Court added its judicial gloss. The Court supported a broad construction, declaring that “[i]n exempting from the income tax the value of property acquired by bequest, devise, or inheritance, Congress used comprehensive terms embracing all acquisitions in the devolution of a decedent’s estate.”27
Notwithstanding the high court’s instruction, questions continue to arise as to whether a cash bequest qualifies for income tax exemption. This is particularly true for cash bequests to service providers.
Could an attorney take advantage of this provision and exclude the amount of a legacy received under a will if the gift was made in lieu of payment of legal fees during the client’s lifetime? The US Court of Appeals for the Second Circuit addressed this exact circumstance.
In Wolder v. Commissioner,28 the Second Circuit held that a “transfer in the form of a bequest was the method that the parties chose to compensate [the attorney] for his legal services, and that transfer is . . . subject to taxation whatever its label . . . may be.”29 The attorney/service provider was denied tax relief. Labels and classifications attached by the parties do not control tax consequences.30
The proper scope of the section 102(a) exemption (and the Supreme Court’s broad construction) also arises with respect to caregiver cash bequests. Was the bequest made out of love, affection, and devotion? Or alternatively, was the bequest made on account of a business or employment relationship? What if the asset was property instead of cash? Would that make a difference?
The US Tax Court has twice addressed this question. In Miller v. Commissioner,31 A and B agreed to take care of the decedent for the rest of his life and in return, the decedent agreed to leave all of his personal property to A and B. The decedent stated that this transfer was in payment for their services. The decedent’s compensatory intent supported the tax court’s ruling that the transfer was taxable to A and B.
Years later, in Roberts v. Commissioner,32 the tax court again addressed the proper tax treatment of a caregiver cash bequest. In Roberts, the tax court supported exclusion of the bequests under section 102(a). The key facts supporting this finding were the caregiver’s long-term relationship and the finding that the primary origin and character of the decedent’s transfer flowed out of love, affection, and devotion. With this donative underpinning, the section 102(a) exemption was available.
“Interest” Characterization
Even though the cash bequest itself is generally exempt from income tax (except when it is characterized as compensation), a separate, more problematic, issue arises regarding interest that is paid with respect to cash bequests.
If statutorily compelled interest is added, what is the legal character of this additional amount? Is the interest payment “real” interest (and taxable as ordinary income to the beneficiary)? Or is the additional amount simply a component of the bequest (excluded under Section 102(a))? Or finally, if not “real” interest, would the additional amount be characterized as a transfer of a portion of the estate’s income (possibly taxable under the fiduciary income tax rules)?
There is no statute or regulation that expressly and particularly prescribes the income tax effect of the receipt or payment of this statutorily mandated interest on a cash bequest.33 As “real” interest, the payment would be interest income to the beneficiary and thus taxed as ordinary income. The section 102(a) exemption would not apply.
Alternatively, as a share of estate income, the payment would be governed by the rules of sections 661 and 662, providing, in general, for an income tax deduction for the estate for income distributed to a beneficiary and a corresponding inclusion of that amount in the taxable income of the beneficiary.
In 1973, the IRS announced its public view regarding the correct characterization of interest added on a cash bequest. For income tax purposes, the IRS concluded in Rev. Rul. 73-322 that interest on a pecuniary bequest is real interest, and the section 102(a) exemption would not apply.34 The ruling offered no analysis and summarily concluded that the section 102(a) exclusion is not available.
The IRS’s view is not “law” and is not binding upon taxpayers.35 The view expressed in the ruling has been embraced in several cases36 and discarded in at least one.37 The correct characterization remains uncertain.
In United States v. Folckemer,38 the US Court of Appeals for the Fifth Circuit held that interest payments were includable, as interest, in the recipient’s gross income in the year of receipt. The Fifth Circuit noted that the recipient was not “an income beneficiary of the estate.”39
Contrary to this interest inclusion view, the Federal Claims Court has characterized interest on a cash bequest as estate income rather than as “real” interest. In Davidson v. United States40 (directly contrary to Rev. Rul. 73-322 and Folckemer), the claims court treated the interest add-on amount as a distribution of estate income to beneficiaries potentially taxable to the beneficiary under the predecessor of section 662.41
A federal court in South Dakota agreed. In Schwan v. United States, the court declared that “it would be absurd” to conclude that interest paid on deferred legacies constitutes payment of interest on “‘indebtedness.’”42
In the face of this long-standing uncertainty, the Treasury Department has weighed in, at least to some extent, in an unexpected and highly technical fashion. This occurred in 1999, when the Treasury Department issued proposed regulations addressing the separate share rules as modified by the Taxpayer Relief Act of 1997 (1997 Tax Act).43
In the 1997 Tax Act, Congress extended the separate share rules to estates. Prior to this change, only trusts were covered by the separate share rules. The 1997 Tax Act extended the separate share rules so that “there are separate shares in an estate when a beneficiary or class of beneficiaries has an interest in a decedent’s estate (whether income or corpus) that no other beneficiary or class of beneficiaries has in the decedent’s estate.”44
In developing the regulations reflecting the 1997 statutory change, the Treasury Department expanded the scope of the guidance project to address interest awarded in a unique circumstance. Prior to this effort, the federal courts had issued conflicting opinions on whether interest payments added to a surviving spouse’s “elective share” should be characterized as “real” interest, and the Treasury concluded that regulatory guidance was needed in this very unusual circumstance that provides a possible analogy for all cash bequests.45
During its development of the final regulations, the Treasury Department considered many technical comments, including those made by the American Bankers Association. These comments directly expressed its view of the statutory interest addition for all cash bequests:
[I]t is a more appropriate application of the rules of Subchapter J and sections 661 and 662 to treat any so-called ‘interest’ payable on pecuniary dispositions, either under the terms of the governing instrument or local law, as a measure of the income to which a beneficiary is entitled and not as interest within the meaning of sections 61 and 163. For this reason, we are inclined to agree with the rationale in Technical Advice Memorandum 9604002 that such ‘interest’ paid pursuant to delayed pecuniary gifts and bequests is merely a mechanism for allocating estate income among estate beneficiaries.46
The Treasury Department issued final regulations in December of 1999.47 The final regulation addressed interest awarded in an elective share award but failed to address all cash bequests.48 The Treasury Department concluded that an “interest” payment on a surviving spouse’s elective share is taxable to the surviving spouse as interest taxable under section 61.49 The final regulations did not embrace the American Bankers Association comments or the broader application of interest for all cash bequests.
Income Tax Interpretations for Interest on Pecuniary Gifts
| “Real Interest” Characterizations | Interest as Share of Estate Income |
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Consequences—Can the Estate Deduct the Interest Payment?
With respect to the estate’s income tax return, how is the interest payment treated? Rev. Rul. 73-322 addressed both the recipient and the payor tax treatments. The ruling declared that no income distribution deduction is allowed when local law requires an executor to pay interest on account of unpaid general bequests.
Rev. Rul. 73-322 explained that, in this circumstance, “the relationship between the parties is that of debtor and creditor rather than that of estate and income beneficiary.”50 No substantive analysis was provided.
The ruling also concluded the payments should be treated as an interest expense that could be deducted under section 163 (as that prior law allowed). In 1986, however, Congress fundamentally changed the deductibility of interest. After that legislative change, so-called “personal” interest became nondeductible.
Some have argued that if such “interest” is interest for income tax purposes, it might be exempted from the definition of personal interest by virtue of section 163(h)(2)(B). This section would support the estate’s deduction under section 163(d) as an investment interest expense to the extent of the estate’s net investment income.
This favorable characterization, however, must be supported factually. The PR must establish that the delay in payment of the bequest was necessary for the estate to retain income producing assets.
Estate Tax Law Issue: Section 2053 Administration Expense Deduction
As trust and estate practitioners acknowledge, estate planning often requires planning for the separate estate and gift tax systems. The interest characterization creates uncertainty under the estate tax system. For estate tax purposes, some taxpayers have sought to deduct the payment as an administrative expense under IRC § 2053. This is the statutory rule for deduction of attorney fees and fiduciary compensation. As described below, the IRS, at least informally, disagrees.
On July 4, 2025, President Trump signed the legislation widely referred to as “One Big Beautiful Bill.”51 Section 70106 of that legislation enacted a permanent increase in the federal estate tax exemption to $15 million and a combined $30 million exemption for married couples. The change is effective for estates of decedents dying and gifts made after December 31, 2025.
With this adjustment, many estates will not be subject to the federal wealth tax system. Nevertheless, for those large estates still subject to the federal estate tax system, the treatment of the interest add-on amount presents an estate tax dilemma.
In Technical Advice Memorandum 9604002, the IRS concluded that an interest payment on a pecuniary legacy did not create a section 2053 administrative expense deduction.
A technical advice memorandum (TAM) is distinct from a revenue ruling and substantially a very different type of IRS guidance. A TAM is not a public position but rather is guidance offered by the IRS Chief Counsel at the request of others in the IRS. A TAM constitutes a final determination of the IRS’s position with respect to the specific issue within the context of the specific fact pattern set forth in the TAM. As such, a TAM should be relied upon with caution.
In its TAM addressing the interest add-on, the IRS had two interconnected bases for rejecting the section 2053 administrative expense deduction. First, the IRS looked to the nature of the payment of interest on a pecuniary bequest:
We believe the analysis of the court in [a Pennsylvania state law case] confirms that the statutory interest is merely a mechanism to allocate estate income among the estate beneficiaries to compensate the pecuniary legatees for a delay during administration in funding their bequests. Thus, payment of statutory interest should no more be viewed as an administration expense deductible under section 2053 than should the payment of estate income to estate beneficiaries.
Second, the IRS concluded that the expense was not necessary to the administration of the expense:
In the present case, there was no liquidity problem or any other evident need for the executors to borrow money in administering the estate. Consequently, we cannot conclude that the interest payments made in this case are properly characterized as interest payments. However, in view of the purpose of the payments, ensuring allocation of trust income among the beneficiaries in an equitable manner, the payments cannot properly be viewed as a deductible expense of administering the estate under section 2053.
Clearly this approach is fundamentally at odds with the Rev. Rul. 73-322 addressing the income tax issue. Recognizing an inconsistency, the TAM stated that “the income tax and estate tax are not in pari materia.”52
As explained above, for taxable estates, the administrative expense treatment of interest on cash bequests remains uncertain. While TAM 9604002 failed to support treating interest on cash bequests as a deductible administrative expense, Rev. Rul. 73-322 offers some authority for interest expense treatment.
In the face of these conflicting authorities, clients should be informed as to what authorities support the alternative legal positions and potential risks (and challenges) associated with the chosen position asserted in estate tax return filings.
Conclusion
Cash bequests remain popular with clients for their simplicity and ease of expression. But their use can cast uncertainty on a host of issues, including the characterization of cash bequests and tax implications of interest paid on those bequests. The income tax treatment of interest added to a cash bequest remains uncertain. The Treasury Department’s 1999 regulations provide some additional support for “real” interest treatment. To date, however, no definitive authority has addressed the issue. By appreciating the issues and conflicting authorities, clients can be encouraged to document their donative intent and confirm their generosity while reducing unnecessary disputes.
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Notes
citation Walker, “Show Me the Money: The Surprising Complexity of Cash Bequests,” 55 Colo. Law. 42 (Mar. 2026), https://cl.cobar.org/features/show-me-the-money.
1. Restatement (Third) Property (Wills and Donative Transfers) § 5.1(2) (American Law Institute 1998) (“a general devise is a testamentary disposition, usually of a specified amount of money or quantity of property, that is payable from the general assets of the estate”). As a leading treatise recognized, this clause “is too often erroneously referred to, by lawyers as well as laymen, as a specific legacy, because the legacy is of a specific sum.” Stocker et al., Stocker and Rikoon on Drawing Wills and Trusts 2–21 (12th ed. PLI 2000).
2. Restatement (Third) Property § 5.1(1) (a specific devise is a testamentary disposition of a specifically identified asset).
3. Id. § 1.1. cmt. (“In the absence of directions from the decedent, the controlling state law of abatement determines the order in which devises and intestate shares are used to satisfy claims.”). See, e.g., Breymaier v. Davidson, 368 P.2d 965 (Colo. 1962) (reviewing the application of statutory abatement to cash bequests).
4. UPC § 2-606; CRS § 15-11-606 (ademption); UPC § 3-902; CRS § 15-12-902 (abatement).
5. Restatement (Third) Property § 5.2, cmt. (the doctrine of ademption by extinction only applies to specific devises).
6. Id. § 1.1. cmt., supra note 3.
7. In re Barbara A. Young Living Tr., No. 355309, 2022 WL 1194027 (Mich.Ct.App. Apr. 21, 2022).
8. Id.
9. Id.
10. Id.
11. Id.
12. See 33 A.L.R. 4th 708 (delay in making distributions grounds for removal of executor); In re Est. of Froehlich, 493 N.Y.S.2d 967, 970 (1985) (charitable legatees successfully compelled payment of the legacies).
13. UPC § 3-904.
14. See CRS § 5-12-101.
15. See, e.g., NationsBank of South Carolina v. Greenwood, 468 S.E.2d 658 (S.C.Ct.App. 1996) (interest due on undistributed assets after anniversary of appointment of personal representatives); In re Est. of Holan, 680 N.W.2d 331 (S.D. 2004) (those receiving a money legacy under a will are in a similar position to creditors and are therefore entitled to interest from the time they would have received payment absent the delay from a will contest).
16. Reppy and Tompkins, History of Wills—Descent and Distribution Probate and Administration 144 (Callaghan and Company 1928).
17. State Bank of Chicago vs. Goss, 176 N.E. 739 (Ill. 1931).
18. Cleary v. White’s Est., 58 A.2d 1, 4 (Conn. 1948).
19. Est. of Vaden, 677 P.2d 659 (Ok.Ct.App. 1983).
20. Id.
21. CRS §§ 15-1-101 et seq.
22. CRS § 15-1-406(c) (emphasis added).
23. Uniform Principal and Income Act (1997) § 201(3) cmt., “Interest on pecuniary bequests.”
24. CRS §§ 15-1.2-101 et seq.
25. Id.
26. Lyeth v. Hoey, 305 U.S. 188 (1938).
27. Id. at 194.
28. Wolder v. Comm’r, 493 F.2d 608 (2d Cir. 1974).
29. Id.
30. See Frank Lyon Co. v. United States, 435 U.S. 561, 584 (1978) (rejecting “meaningless labels attached by the parties”).
31. Miller v. Comm’r, 53 T.C.M. (CCH) 962 (1987).
32. Roberts v. Comm’r, 69 T.C.M. (CCH) 2409 (1995).
33. Ferguson et al., Federal Income Taxation of Estates, Trusts, and Beneficiaries § 709A (3d. ed. Aspen Law and Business 2011) (referring to the law on this issue as “obscure” and there is authority in both directions).
34. Rev. Rul. 73-322, 1973-2 C.B. 44.
35. A revenue ruling is not controlling as the courts have held a revenue ruling is entitled to no more weight than a position in an IRS brief.
36. Wolf v Comm’r, 32 B.T.A. 959 (1935), aff’d, 84 F.2d 390 (3d Cir. 1936); United States v. Folckemer, 307 F.2d 171 (5th Cir. 1962).
37. Davidson v. United States, 149 F.Supp. 208 (U.S.Ct.Cl. 1957).
38. Folckemer, 307 F.2d 171.
39. Id.
40. Davidson, 149 F.Supp. 208.
41. See also Schwan v. United States, 264 F.Supp. 2d 887, 896 (D.S.D. 2003) (“It would be absurd” to conclude that interest paid on deferred legacies might generate an interest deduction, because “legacies are not properly characterized as ‘indebtedness.’”).
42. Schwan, 264 F.Supp. 2d at 896.
43. Pub. L. No. 105-34 (Aug. 5, 1997).
44. T.D. 7633 1979-2 C.B. 237; 44 Fed. Reg. 57,926 (Oct. 9, 1979).
45. 64 F.R. 790, 791 (Jan. 6, 1999).
46. American Bankers Association comment letter at 8 (May 17, 1999).
47. T.D. 8849, 64 F.R. 72,540 (Dec. 28, 1999).
48. Treas. Reg. § 1.663(c)-5, ex. (7)(ii).
49. 64 F.R. at 72,545.
50. Rev. Rul. 73-322, 1973-2 C.B. 44.
51. H.R. 1, Pub. L. No. 119-21, 131 Stat. 72, 162 (July 4, 2025).
52. The federal courts affirm this view. See Farid-es-Sultaneh v. Comm’r, 160 F.2d 812, 814–15 (2d Cir. 1947) (“the income tax provisions are not to be construed as though they were in pari materia with either the estate tax law or the gift tax statutes”).