Internal Revenue Service
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 Rev. Rul. 66-60

1966-1 C.B. 221

IRS Headnote

Where a husband and wife hold property as tenants by the entirety and it cannot be determined that they have died other than simultaneously, the full value of the property (purchased entirely with consideration furnished by the husband) is includible in the husband's gross estate. However, under section 3 of the Uniform Simultaneous Death Act, a presumption of survivorship in the wife is created with respect to half of the property held by the entirety. With respect to this property she has survived and the property passes to and is includible in her estate. Therefore, the husband's estate is entitled to a marital deduction to the extent of the one-half interest passing to the wife.

Full Text

Rev. Rul. 66-60

Advice has been requested as to (1) the extent to which the value of property is includible in each decedent's gross estate in a situation where there is simultaneous death and the property involved is held in tenancy by the entirety, and (2) whether a marital deduction is allowable under section 2056 of the Internal Revenue Code of 1954.

A husband and wife were killed in an automobile accident under circumstances wherein there was not sufficient evidence as to which spouse may have died first. The husband furnished the entire consideration for the purchase of certain realty which was held by them as tenants by the entirety. The husband's will contained no statement as to which should be considered to have survived the other in case they died in a common disaster. The decedents resided and perished in a state which has adopted the Uniform Simultaneous Death Act, and the property in question was located in that state.

The purpose of the Uniform Simultaneous Death Act is to provide for the devolution of property where there is insufficient evidence that persons have died otherwise than simultaneously. Section 3 of the Act is pertinent to this case and it states:

Joint Tenants or Tenants by the Entirety-Where there is no sufficient evidence that two joint tenants or tenants by the entirety have died otherwise than simultaneously the property so held shall be distributed one-half as if one had survived and one-half as if the other had survived.

With regard to the amount includible in the husband's gross estate as to the tenancy by the entirety property, section 2040 of the Code and section 20.2040-1(a)(2) of the Estate Tax Regulations require that the value of all property in which the decedent at the time of his death held an interest either as joint tenant or as a tenant by the entirety be included in his gross estate, except to the extent that it can be shown that a part of such property originally belonged to the spouse or other joint tenant or was received or acquired by him or her from the decedent for an adequate and full consideration.

Inasmuch as the property in question was held in tenancy by the entirety at the time of the husband's death and since there is no evidence to indicate that the wife furnished any consideration for the property, it is held that the full value of the property is includible in the husband's gross estate.

With respect to the wife's interest in the entirety property, section 2033 of the Code provides that the gross estate of a decedent includes the value of all property in which he had an interest at the time of his death. Inasmuch as the estate of the wife is entitled to a half interest in the property under the courts' construction of the Uniform Simultaneous Death Act, as discussed hereinafter, one-half of the value of the property held in tenancy by the entirety is includible in the wife's estate under section 2033 of the Code.

With regard to the allowable marital deduction, section 2056 of the Code states that a deduction is allowed with respect to the value of any property which passes from the decedent to his surviving spouse, but only to the extent that such property is included in determining the value of the decedent's gross estate.

Section 20.2056(a)-1(b) of the regulations sets forth five conditions which an executor must establish in order to obtain the marital deduction. Two of these are:

(1) That the decedent was survived by his spouse, and

(2) That the property interest passed from the decedent to his spouse.

Where the order of deaths of the decedent and his spouse cannot be established by proof, a presumption (whether supplied by local law, the decedent's will or otherwise) that the decedent `was survived by his spouse' will be recognized as satisfying requirement (1) only to the extent that it has the effect of giving to such spouse an interest in property includible in her gross estate. Under such circumstances, if an estate tax return is required to be filed for the estate of the decedent's spouse, the marital deduction will not be allowed in the final audit of the estate tax return of the decedent's estate with respect to any property interest which has not been finally determined to be includible in the gross estate of his spouse. Section 20.2056(e)-2(e) of the regulations.

The crux of the matter, therefore, is whether under the Uniform Simultaneous Death Act there is a presumption that the husband's spouse survived him since the husband's will contained no such presumption.

Section 3 of the Uniform Simultaneous Death Act does not include the word `presumption.'  However, section 20.2056(e)-2(e) of the regulations is not interpreted as requiring the existence of an express `presumption' in a statement of the state law if the effect on the administration of each one-half of the joint tenancy property is the same as if there were an express presumption of survivorship. The Internal Revenue Service interprets section 3 of the Uniform Act as providing a formula for the devolution of the decedent's property and creating a presumption of survivorship in each person as to his own property. This view is expressed by the courts in various states states where cases have arisen under the Act.

In Miami Beach First National Bank v. Miami Beach First National Bank , 52 So.2d 893 (1951), the Supreme Court of Florida, in deciding that the estate of the remainderman was entitled to her share pursuant to the provisions of the will, said at page 896:

The Simultaneous Death Act discards the idea of proving survivorship and proceeds on the presumption that each person is the survivor as to the property alloted sic  to him and administers the estate accordingly.

Here the court interpreted the Act as creating a presumption of survivorship of a person with respect to the property received by the estate of that person.

In Mayor and City Council of Baltimore v. White , 189 Md. 571, 56 A.2d 824 (1948), the Court of Appeals of Maryland in arriving at its conclusion held, in effect, that the Act creates a presumption of survivorship in each as to his own property, and there is, therefore, survivorship within the meaning of the lapsed legacy statute.

Therefore, it is held that where a husband and wife hold property as tenants by the entirety and it cannot be determined that they have died other than simultaneously, section 3 of the Uniform Simultaneous Death Act creates a presumption of survivorship in the wife with respect to a one-half interest in the property sufficient to satisfy the requirements of section 2056(a) of the Code to the extent recognized under section 20.2056(e)-2(e) of the regulations, thereby entitling the husband's estate to a marital deduction of the value of the one-half interest passing to the wife.