*208 Decision will be entered under Rule 50.
1. Land included in decedent's estate on which was located his homesite held, on facts and under applicable Florida law, homestead property in its entirety in which decedent's widow acquired no more than a terminable interest excluded from the marital deduction under section 812 (e) (1) (B), Internal Revenue Code of 1939.
2. Subsequent disclaimers by some, but not all of the descendants held, further, rendered ineffective by section 812 (e) (4) (B), Internal Revenue Code of 1939.
*30 In this proceeding respondent determined deficiencies in estate tax in the total amount of $ 2,225.65. One adjustment is not contested. Certain concessions have been made by respondent. As the case*209 is now presented, the sole question for our decision is whether certain realty included in decedent's gross estate at his death is precluded from qualifying for the marital deduction on the ground that this property was a homestead in which the wife acquired no more than a terminable life interest at the time of decedent's death within the meaning of section 812 (e) (1) (B) of the Internal Revenue Code of 1939.
FINDINGS OF FACT.
Some of the facts have been stipulated and are found accordingly.
Irvin C. Nelson, hereinafter referred to as decedent, resided in Pinellas County, Florida, at the time of his intestate death on September 17, 1950. Florine Nelson, his widow, is administratrix of his estate. Surviving the decedent were his widow, two sons, a daughter, and a grandson, John Burton Nelson, Jr., who is the son of a deceased son. Marion Snowden, who had been reared by decedent and his widow but had never been legally adopted by them, also survived decedent.
*31 Decedent's Federal estate tax return was filed on November 28, 1950, with the collector of internal revenue for the district of Florida. Valuations at the date of death were utilized in the return.
Decedent and Florine*210 were married in Tampa, Florida, on February 5, 1915, and went immediately to live on a 40-acre parcel of land in Pinellas County, Florida, belonging to decedent's mother. This parcel of land then consisted of a 5-acre plot of ground upon which was situated a dwelling house and barn located in an oak thicket and bordering on a grove trail, and a contiguous 35-acre plot unimproved except for about 3 acres in citrus grove.
At the time of his marriage and for 2 or 3 years thereafter, decedent was employed at Taylor's Packing House in Largo, Florida, in the winter and worked on the 40-acre plot in the summer. During this period he and Florine entered into a truck farming project in which they both participated actively. In 1919, the business was expanded to include taking care of citrus fruit groves for others, and was continued until decedent's death in 1950. They conducted this business as Nelson Groves under a written partnership agreement from 1944 until decedent's death. Partnership Federal income tax returns for Nelson Groves were filed, audited, and approved for each of the years covered by the written agreement. As a part of the depreciation schedule of each return a 55-acre*211 grove is listed as an asset of the partnership.
In 1919, decedent's mother had conveyed to him the 40-acre parcel referred to above. In 1924, decedent purchased a 20-acre unimproved tract of land adjoining the 40-acre tract. Title was taken in decedent's name alone. A portion of the purchase price was paid in cash at the time of purchase and the balance thereafter. The cash used for all payments was taken from decedent's bank account. That account was held in decedent's name alone. The widow had no control over that account except through her capacity as decedent's wife.
On August 5, 1950, about 1 month prior to decedent's death, the two above parcels and a noncontiguous 20-acre parcel were conveyed by decedent to himself and Florine as an estate by the entirety. The consideration for this conveyance was the fulfillment of a previous arrangement and practice of long standing whereby all their property was considered and treated as belonging to them equally. No full or adequate consideration in money or money's worth supported this deed and conveyance.
On November 15, 1950, decedent's surviving children conveyed by quitclaim deed to his widow any interest which they may have*212 had in the above parcels. Marion Snowden joined in the execution and conveyance. John Burton Nelson, Jr., decedent's grandson, did not participate.
*32 Under Schedule E of decedent's estate tax return, entitled "Jointly Owned Property," the above-described property, including the two contiguous and the one noncontiguous parcels, is listed at its full valuation undiminished by any claim of contribution on the part of the surviving spouse. As a result of respondent's concession, the noncontiguous parcel is no longer in controversy. The two contiguous parcels had a fair market value of $ 68,400 at the date of decedent's death. On that date the 5-acre oak grove section included in these parcels, on which decedent's homesite was located, had a fair market value of $ 13,400.
All of the two contiguous parcels of real property in decedent's estate was homestead property within the purview of the Florida constitution.
OPINION.
Whether the widow acquired no more than a terminable interest at decedent's death in the 60 acres remaining in controversy, thus requiring the exclusion of its value from the marital deduction under section 812 (e) (1) (B), Internal Revenue Code of 1939, 1*214 *213 must be determined from all the facts and circumstances 2 as they would be interpreted under Florida law. Estate of Gust Marion Peterson, 23 T. C. 1020; Estate of Emmet Awtry, 22 T.C. 91">22 T. C. 91. There can be little doubt that the 5-acre oak grove section in which decedent's actual homesite was located at his death constituted homestead property under Florida law. Baker v. State, 17 Fla. 406">17 Fla. 406. The Florida statute specifically provides that:
if the decedent is survived by a widow and lineal descendants, the widow shall take a life estate in the homestead, with vested remainder to the lineal descendants in being at the time of the death of the decedent.
That lineal descendants remained at decedent's death is not disputed. It follows that the widow received no more than a terminable interest *33 in the 5-acre tract at decedent's death. See Charles E. Bedford, 5 T.C. 726">5 T. C. 726.
While the result is more debatable we reach a similar conclusion as to the 55 acres of citrus groves remaining in dispute. Thirty-five of these were acquired by decedent from his mother with the homesite as a single unit, and 20 were subsequently purchased but all were contiguous to the 5-acre homesite. Homestead property has been defined broadly by Florida courts to include all rural land contiguous to the actual residence, regardless of its use, as long as the constitutional limitation of 160 acres is not exceeded. "In McDougall et al. v. Meginniss et al., 21 Fla. 362">21 Fla. 362, this [Florida] court held:
'The Constitution of this State, Section 1, Article 9 [article 10], exempts a homestead to the extent of one hundred and sixty acres of land outside an incorporated city or town to the head of a family residing in this State, with the improvements on the real estate, without regard to the use that may be made of that portion of the tract not covered by the residence*215 and enclosures.
* * * *
To say how the homesteader should use his land, whether as a "farm," or for a "saw-mill," or a "grist-mill," or a "carding and fulling mill," would be to impose a judicial condition not found in the Constitution of the State. The Constitution does not prescribe the manner in which the tract shall be used beyond residing thereon.'"
Fort v. Rigdon, 100 Fla. 398">100 Fla. 398, 129 So. 847">129 So. 847. "This language is clear, and it is significant that the framers of the Constitution of 1885, when they came to write the homestead and exemption clause for that Constitution, used the language of the Constitution of 1868 on the subject of the homestead's extent, which had been construed by a judge of the Supreme Court of the United States to mean that all improvements made by the homesteader in the course of his business or occupation were exempt, and by the Supreme Court of Florida, which had held that nothing more was required than for the homesteader to live on the tract to render the whole 160 acres exempt, and the Constitution did not prescribe the manner in which the land should be used beyond residing on it." Armour & Co. v. Hulvey, 73 Fla. 294">73 Fla. 294, 74 So. 212">74 So. 212.*216
Decedent developed the 35 acres included in the original property as citrus groves. His subsequent acquisition and improvement of the contiguous 20-acre tract was but an expansion of the original holding. Croker v. Croker, (S. D., Fla.) 7 F. 2d 218. 3 The private grove road, described in testimony as no more than a trail, which separated the 5 acres from the citrus area is insufficient to destroy the contiguity of the properties. Clark v. Cox, 80 Fla. 63">80 Fla. 63, 85 So. 173">85 So. 173; Shone v. Bellmore, 75 Fla. 515">75 Fla. 515, 78 So. 605">78 So. 605. Cases like Milton v. Milton, 63 Fla. 533">63 Fla. 533, 58 So. 718">58 So. 718, and Brandies v. Perry, 39 Fla. 172">39 Fla. 172, 22 So. 268">22 So. 268, where *34 the properties were widely separated are of course inapplicable here. See Shone v. Bellmore, supra.
*217 Moreover, in the absence of proof that decedent received consideration in money or money's worth for the transfer of real property deeded in his name to the partnership in 1944 or for the creation of a tenancy by the entireties therein in 1950, petitioner has failed to sustain its contention that decedent validly abandoned his homestead, in whole or in part, prior to his death. Church v. Lee, 102 Fla. 478">102 Fla. 478, 136 So. 242">136 So. 242; Charles E. Bedford, supra. See Beall v. Pinkney, (C. A. 5) 150 F.2d 467">150 F. 2d 467.
And the fact that some (but not all) of decedent's surviving descendants subsequently conveyed by quitclaim deed whatever interest they may have acquired at his death in these 60 acres cannot alter the terminable nature of the widow's interest for estate tax purposes. Congress has provided specifically that disclaimers of interest by third parties which result in the receipt by the surviving spouse of an interest to which she would not otherwise be entitled shall not be recognized. Sec. 812 (e) (4) (B), I. R. C. 1939. 4 And see Charles E. Bedford, supra.*218 Respondent's determination as to the 60 acres remaining in controversy is accordingly affirmed.
Because of certain concessions by respondent,
Decision will be entered under Rule 50.
Footnotes
1. SEC. 812. NET ESTATE.
For the purpose of the tax the value of the net estate shall be determined, in the case of a citizen or resident of the United States by deducting from the value of the gross estate --
* * * *
(e) Bequest, Etc., to Surviving Spouse. --
(1) Allowance of marital deduction. --
* * * *
(B) Life Estate or Other Terminable Interest. -- Where, upon the lapse of time, upon the occurrence of an event or contingency, or upon the failure of an event or contingency to occur, such interest passing to the surviving spouse will terminate or fail, no deduction shall be allowed with respect to such interest --
(i) if an interest in such property passes or has passed (for less than an adequate and full consideration in money or money's worth) from the decedent to any person other than such surviving spouse (or the estate of such spouse); and
(ii) if by reason of such passing such person (or his heirs or assigns) may possess or enjoy any part of such property after such termination or failure of the interest so passing to the surviving spouse;↩
2. E. g., Gulf Refining Co. v. Ankeny, 102 Fla. 151">102 Fla. 151, 135 So. 521">135 So. 521↩.
3. "Croker was entitled to 160 acres of land as a homestead, and, if his homestead consisted of a less number of acres, he could add to it from contiguous property up to that number of acres."↩
4. SEC. 812. NET ESTATE.
(e) Bequests, Etc., to Surviving Spouse. --
* * * *
(4) Disclaimers. --
* * * *
(B) Disclaimer by Any Other Person. -- If under this subsection an interest would , in the absence of a disclaimer by any person other than the surviving spouse, be considered as passing from the decedent to such person, and if a disclaimer of such interest is made by such person and as a result of such disclaimer the surviving spouse is entitled to receive such interest, then such interest shall, for the purposes of this subsection, be considered as passing, not to the surviving spouse, but to the person who made the disclaimer, in the same manner as if the disclaimer had not been made.↩