Rev. Rul. 55-609

Advice has been requested with respect to the taxability of a death gratuity payment appropriated out of the contingent fund of the House of Representatives under Public Law 663, Eighty-third Congress, 2d Session, 48 Stat. 800.

Provision is made in the Third Supplemental Appropriation Act of 1952, 66 Stat. 101, that

* * * any other death gratuity payment at any time specifically appropriated by this or any other Act or at any time made out of the contingent fund of the House of Representatives or of the Senate, shall be held to have been a gift.

Section 102 of the Internal Revenue Code of 1954 provides that gross income does not include the value of property acquired by gift, bequest, devise, or inheritance. (Also, see section 22(b)(3) of the 1939 Code to the same effect.)

Accordingly, it is held that a death gratuity payment, specifically authorized by Congress, which comes within the intendment of the Third Supplemental Appropriation Act of 1952, 66 Stat. 101, is a gift. Such gift is excludable from gross income of the recipient thereof for Federal income tax purposes and is not includible in the gross estate of the decedent for Federal estate tax purposes