Internal Revenue Service
Revenue Ruling

TaxLinks.com   sm

 Rev. Rul. 58-13

1958-1 C.B. 342

Tax Treaties

IRS Headnote

The failure of a spouse to relinquish her inchoate dower interest in real property will have no effect in determining the value of the property for Federal gift tax purposes.

Full Text

Rev. Rul. 58-13

Advice has been requested whether the failure of a spouse to relinquish her inchoate dower interest in real property will affect the value of the property for Federal gift tax purposes.

In the instant case the taxpayer conveyed a parcel of real estate to his two children as tenants in common. His wife did not join in the execution of the deed or to otherwise release her inchoate dower interest in the property. The question presented is whether the fair market value of the property should be reduced by the value of the wife's dower interest in determining the value of the gift for Federal gift tax purposes.

Section 2512 of the Internal Revenue Code of 1954 provides, in part, as follows:

(a) If the gift is made in property, the value thereof at the date of the gift shall be considered the amount of the gift.

(b) Where property is transferred for less than an adequate and full consideration in money or money's worth, then the amount by which the value of the property exceeded the value of the consideration shall be deemed a gift, * * *.

In the case of Estate of Koert Bartman v. Commissioner , 10 T.C. 1073, acquiescence C.B. 1948-2, 1, the donor transferred real property to each of his three children, his wife joining in the deeds and releasing her inchoate dower interest in the properties. With respect to the wife's dower interest, the court stated, `We shall not dwell upon the petitioner's second point, that the decedent's wife, by joining in the deeds, made a gift of her inchoate dower rights, and that the value thereof should be deducted in determining the amount of the decedent's gifts. It is recognized in the petitioner's brief that Correlia Mason Thompson , 37 B.T.A. 793, is a direct ruling to the contrary; and, while we have carefully considered the petitioner's elaborate arguments in this connection, we adhere to the ruling in that case.' See also the case of David L. Hopkins v. Magruder , 34 Fed.Supp. 381, affirmed, 122 Fed.(2d) 693, in which the court said, `the fact that the wife's dower interest had previously been created, namely, by her marriage to plaintiff, and therefore had previously attached to the property, does not justify making a deduction for its value.'

In view of the foregoing, it is held that the failure of a spouse to relinquish her inchoate dower interest in real property will have no effect in determining the value of the property for Federal gift tax purposes.