Ninth Circuit Affirms Tax Court in Estate Tax Case
Estate of Howard V. Moore et al. v. Commissioner
- Case NameEstate of Howard V. Moore et al. v. Commissioner
- CourtUnited States Court of Appeals for the Ninth Circuit
- DocketNo. 20-73013
- JudgePer Curiam
- Parallel Citation2021-2 U.S. Tax Cas. (CCH) P60,7322021 WL 5176461
- Code Sections
- Subject Area/Tax Topics
- Jurisdictions
- Tax Analysts Document Number2021-42370
- Tax Analysts Electronic Citation2021 TNTF 215-222021 TPR 46-14
Estate of Howard V. Moore et al. v. Commissioner
ESTATE OF HOWARD V. MOORE, Deceased; et al.,
Petitioners-Appellants,
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent-Appellee.
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
Tax Ct. Nos. 21209-09, 22082-09
MEMORANDUM*
Appeal from a Decision of the
United States Tax Court
Argued and Submitted October 18, 2021
San Francisco, California
Before: WATFORD and HURWITZ, Circuit Judges, and BAKER,** International Trade Judge.
Prior to Howard V. Moore's death, the Howard V. Moore Family Limited Partnership sold Moore Farms to a third party. The Howard V. Moore Living Trust then sold its interest in the Partnership to the Howard V. Moore Irrevocable Trust No. 1. After Moore's death, the Partnership transferred the proceeds from the sale of the Farm to the Irrevocable Trust; the proceeds were then transferred to the Living Trust and to the Howard V. Moore Charitable Lead Annuity Trust. In its federal estate tax return, the Estate claimed charitable deductions for the funds transferred to the Charitable Trust.
The Commissioner of Internal Revenue found that the proceeds from the sale of the Farm should have been included in the taxable estate. The Commissioner also denied the Estate's claimed charitable deductions for transfers of funds to the Charitable Trust after Moore's death. The Tax Court upheld the Commissioner's decision. On appeal, the Estate does not challenge the inclusion of the proceeds from the sale of the Farm in the taxable estate, arguing only that it is entitled to charitable deductions. We affirm.
A deduction can be taken for “the value of property included in the decedent's gross estate and transferred by the decedent during his lifetime or by will” or trust upon his death to a charitable entity. 26 C.F.R. § 20.2055-1(a). The issue for decision is whether donations to the Charitable Trust were required by the Moore trust documents. Answering this question requires analysis of the express language of those documents. See State ex rel. Goddard v. Coerver, 412 P.2d 259, 262 (Ariz. 1966).
The Estate relies upon Article 5, Section 2 of the Irrevocable Trust, which required the Trustee to make distributions on Moore's death to minimize federal estate tax liability. But this provision is triggered only by a determination that “any asset of this trust” is also an asset of the gross estate. The proceeds of the Farm sale were not assets of the Irrevocable Trust, or for that matter any Moore Trust, notwithstanding that the Irrevocable Trust owned 98% of the Partnership at the time of Moore's death. Rather, the proceeds were the asset of the Partnership, and Article II, Section 1, Paragraph “u” of the Partnership Agreement expressly provided that “no Partner shall have any interest in any of the assets of the Partnership.”
The Estate argues in the alternative that “asset of this trust” is ambiguous, and that we should therefore construe it to encompass the assets of the Partnership to effectuate the purposes of Moore's estate plan. We disagree; the relevant language of both the Irrevocable Trust and Limited Partnership documents is unambiguous: the Irrevocable Trust, as a limited partner, had no “interest in any of the assets of the Partnership.”
The Trustee of the Irrevocable Trust was therefore not required to transfer the Farm's proceeds to the Living Trust and eventually to the Charitable Trust upon Moore's death and the Commissioner therefore correctly denied the Estate's claimed charitable deductions.
AFFIRMED.
- Case NameEstate of Howard V. Moore et al. v. Commissioner
- CourtUnited States Court of Appeals for the Ninth Circuit
- DocketNo. 20-73013
- JudgePer Curiam
- Parallel Citation2021-2 U.S. Tax Cas. (CCH) P60,7322021 WL 5176461
- Code Sections
- Subject Area/Tax Topics
- Jurisdictions
- Tax Analysts Document Number2021-42370
- Tax Analysts Electronic Citation2021 TNTF 215-222021 TPR 46-14