The decedent’s will reads in part “I give, devise and bequeath to Mary a sum of

Question

The decedent’s will reads in part “I give, devise and bequeath to Mary a sum of money equal to the value of one-third of my residuary estate as finally determined.”

a.         this is a devise of a specific sum of money and Mary will receive it from the estate income tax free.

b.        this is not a devise of a specific sum of money and Mary will be taxed on it to the extent of her share of DNI.

c.         satisfaction of this devise will always result in capital gain to the estate.

d.        satisfaction of a devise so worded violates the rule against perpetuities.

Explanation / Answer

Satisfaction of this devise always result in capital gains:
the reason being the capital gain arises on sale of estate is taxable
it is taxable in the hands of the taxable person
the taxable person can be the legal owner of the property or his legal representatives or on whose name the property is held
in the instant case according to the devise 1/3rd of the estate is in the hands of Mary and at the time of sale the entir capital gain if arised shall be completely taxable

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