Appeal of Estate of Janson

[297] OPINION. Teammell : The question involved in this appeal is whether the charitable bequests provided for in the will of the decedent are to be deducted in determining the value of the net estate subject to the estate tax under section 403 of the Revenue Act of 1921, which is as follows: Seo. 403. That for the purpose of the tax the value of the net estate shall be determined— (a) In the case of a resident, by deducting from the value of the gross estate— ⅜ ⅝ ⅝ ⅜ ⅜ ⅝ ⅜ (3) The amount of all bequests, legacies, devises, or transfers, except bona fide sales for a fair consideration in money or money’s worth, in contemplation of or intended to take effect in possession or enjoyment at or after the decedent’s death, to or for the use of the United States, any State, Territory, any political subdivision thereof, or the District of Columbia, for exclusively public purposes, or to or for the use of any corporation organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, [298] including tlie encouragement of art and the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private stockholder or individual, or to a trustee or trustees exclusively for such religious, charitable, scientific, literary, or educational purposes. This deduction shall be made in ease of the estates of all decedents who have died since December 31, 1917. At the hearing it was admitted by counsel for the taxpayer that the courts of Pennsylvania had always interpreted section 8312 of the Pennsylvania statutes, which is quoted in the findings of fact, h> mean that charitable bequests made by will within 30 days of the death of the decedent were void. This admission of counsel for taxpayer is supported by a decision of the Supreme Court of Pennsylvania in In re Arnold's Estate, 249 Pa. 348; 94 Atl. 1076, where the court said: From the earliest interpretation of the statute to the present time, we have uniformly held, as the act declares, that estates devised or bequeathed contrary ^to its provisions are void. See Price v. Maxwell, 28 Pa. 23, 39; Luffberry's App., 125 Pa. 513, 515, 17 Atl. 447; Gray's Est., 147 Pa. 67, 23 Atl. 205; Gregg’s Est., 213 Pa. 260, 264, 62 Atl. 856; Carson’s Est., 241 Pa. 117, 88 Atl. 311; Hegarty’s App., 75 Pa. 503, 516. From the foregoing it appears that the charitable bequests were null and void and that the charities therein named did not, in fact, receive anything from the decedent. The bequests being void, the heirs and next of kin received that which the charities would have received if the bequests had not been void. The heirs and next of kin received the bequests and it was through them, and not through the decedent, that the charities named in the will of the decedent received anything. Since the charitable bequests were null and void, they can not be recognized for the purpose of the deduction provided in section 403 (a) (3). The fact is that the decedent did not, under the laws of Pennsylvania, bequeath anything to the charities named in the will. His effort to do so proved futile by virtue of the statute. The fact that his heirs conveyed to the charities does not entitle the estate to the deduction.