Rev. Rul. 56-270

The decedent bequeathed in trust for the benefit of his wife an amount sufficient to utilize the marital deduction to the maximum extent authorized by section 2056 of the Internal Revenue Code of 1954 after taking into consideration any other property with respect to which such deduction is allowable. The income from the trust is given to the surviving spouse for life with a power exercisable by her alone at death to appoint the entire interest to any other person or persons, or to her estate. Held, the marital trust fund was provided for in a fixed and definite `dollar amount.' Accordingly, capital gains were realized by the estate to the extent that the fair market value of the property on the date of distribution to the trustee exceeds the fair market value thereof on the date of the decendent's death (or, in the event alternate valuation is elected, the fair market value thereof on the alternate valuation date). See William R. Kenan, Jr., et al. v. Commissioner, 114 Fed. (2d) 217, and Sarah P. Suisman v. Eaton, 15 Fed. Supp. 113, affirmed, 83 Fed. (2) 1019, certiorari denied, 299 U.S. 573. Consistent with the foregoing conclusion, it is further held that losses measured by the difference between the basis of the property in the hands of the executor and the value thereof at the date of distribution to the marital trust may be offset against the gains realized.