Page:United States Statutes at Large Volume 62 Part 1.djvu/154

 PUBLIC LAWS-CH. 168-APR. 2, 1948 53 Stat. 124, 130. 26U. 8. ., Supp. I, I§ 812 (d), 861 (a) (3). 53 Stat. 128. 26 U.8.. §826(c). Ante, p. 117. B Stat. 943. 26U. .0. 826(d). Ante, p. 117. 13 Stat. 41 . 26U.. 0.. 113 (a) (5). 63 Stat. 120. 26U. S. C. 5811; Supp. I, i 811 note. Ante, pp. 116, 123. 53 Stat. 118. 26 U.. S.. 800- 9, Sopp.I, H811, 812, 861. Ante, p. 116 it eg. - V ,p.1214. follows: "In case of an election made by the executor under this subsection, then- "(A) for the purposes of the deduction under section 812 (d) or section 861 (a) (3), any bequest, legacy, devise, or transfer enumerated therein, and "(B) for the purposes of the deduction under section 812 (e), any interest in property passing to the surviving spouse, shall be valued as of the date of the decedent s death with adjustment for any difference in value (not due to mere lapse of time or the occur- rence or nonoccurrence of a contingency) of the property as of the date one year after the decedent's death (substituting, in the case of prop- erty distributed by the executor or trustee, or sold, exchanged, or otherwise disposed of, during such one-year period, the date thereof)." (b) The amendment made by this section shall be applicable only with respect to estates of decedents dying after December 31, 1947. SEC. 365. LIABILITY OF LIFE INSURANCE BENEFICIARIES, ETC. (a) Section 826 (c) of the Internal Revenue Code (relating to lia- bility of life insurance beneficiaries) is hereby amended by adding at the end thereof the following new sentence: "In the case of such pro- ceeds receivable by the surviving spouse of the decedent for which a deduction is allowed under section 812 (e) (the so-called 'marital deduction'), this subsection shall not apply to such proceeds except as to the amount thereof in excess of the aggregate amount of the marital deductions allowed under such subsection." (b) Section 826 (d) of the Internal Revenue Code (relating to lia- bility of recipient of property over which decedent had power of appointment) is hereby amended by adding at the end thereof the following new sentence: "In the case of such property received by the surviving spouse of the decedent for which a deduction is allowed under section 812 (e) (the so-called 'marital deduction'), this subsec- tion shall not apply to such property except as to the value thereof reduced by an amount equal to the excess of the aggregate amount of the marital deductions allowed under section 812 (e) over the amount of proceeds of insurance upon the life of the decedent receivable by the surviving spouse for which proceeds a marital deduction is allowed under such subsection." (c) The amendments made by this section shall be applicable only with respect to estates of decedents dying after December 31, 1947. SEC. 366. BASIS OF SURVIVING SPOUSE'S INTEREST IN COMMUNITY PROPERTY. (a) Section 113 (a) (5) of the Internal Revenue Code (relating to basis of property transmitted at death) is hereby amended by adding at the end thereof the following new sentences: "For the purposes of this paragraph the surviving spouse's one-half share of community property held by the decedent and the surviving spouse under the community property laws of any State, Territory or possession of the United States or any foreign country shall be considered to be property 'acquired by bequest, devise, or inheritance' from the decedent, if the death of the decedent was after December 31, 1947, and if at least one-half of the whole of the community interest in such property was includible in determining the value of the decedent's gross estate under section 811. In the case of property held by a decedent and his sur- viving spouse under the community property laws of any State, Territory, or possession of the United States or any foreign country, if the value of any part of the surviving spouse's one-half share of such property was included in determining the value of the gross estate of the decedent and a tax under chapter 3 was payable upon the transfer 124 [62 STAT.

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