*134 Decision will be entered under Rule 50.
The decedent bequeathed his residuary estate to his surviving spouse for life. Upon her death the entire corpus shall go to the decedent's two sons, or the survivor. The decedent's will gave the surviving spouse the power to use the estate in such way as she should deem advisable for the best interests of the estate, and to use so much of it as she might need for the way of life to which she had been accustomed. Held, that the interest passing to the surviving spouse was a terminable interest under section 812 (e) (1) (B) of the Internal Revenue Code, and, therefore, no marital deduction is allowable.
*966 The Commissioner determined a deficiency in estate tax in the amount of $ 91,245.42. The only question to be decided is whether the estate of the decedent is entitled to a marital deduction within the provisions of section 812 (e) of the Internal Revenue Code, where decedent's will provided for a devise and bequest of the residue of his estate to his surviving wife to have and to hold during her natural life and upon her death the entire estate to go to decedent's sons, and which further provided that decedent's wife could use the estate during her lifetime for the best interests of the estate and use so much *967 of it as she might need for the way of life to which she had been accustomed.
FINDINGS OF FACT.
All of thte facts have been stipulated. The facts are found as stipulated. The stipulation and annexed exhibits are incorporated herein by this reference.
Michael Melamid, the decedent, died on January 10, 1950. He was survived by his wife, Zinaida Melamid, who is the executrix of his estate, and by two sons. The estate tax return was filed with the collector of internal revenue for the*136 third district of New York.
The estate tax return shows a gross estate in the amount of $ 528,772.60, and an adjusted gross estate in the amount of $ 476,055.83. The assets of the estate consist primarily of stocks, bonds, and cash.
The decedent's will, which was executed on March 21, 1942, provides, inter alia, as follows:
I hereby give, devise and bequeath all the rest, residue and remainder of my estate of whatever kind and nature the same may be, whether, real or personal and wherever situated to my beloved wife, ZINAIDA MELAMID, to have and to hold during her natural life; and upon her death, the entire corpus of my estate shall go to my beloved sons, provided, however, they have arrived in the UNITED STATES OF AMERICA. In the event that either or both of my beloved sons is not in the UNITED STATES OF AMERICA at the time of my wife's decease, then and in that event, it is my express wish and desire that my cousin, BERNARD J. SADOW, and my friend LEON MICHAELSON, receive and hold, in trust, nevertheless, the share of that son or of both sons, until the time that my son or sons arrives in the UNITED STATES OF AMERICA.
In the event that either of my sons predecease my beloved*137 wife, leaving no issue, then, and in that event, his share shall go to my other son.
* * * *
I hereby give my beloved wife, the power to use my estate during her lifetime as she may deem advisable for the best interests of my estate, and to use so much of it as she may need for the way of life to which she and I have been accustomed.
OPINION.
The petitioner claims for the estate a marital deduction under section 812 (e) (1) (A) of the Code in the amount of $ 246,051.98. The Commissioner disallowed the deduction for the following reason:
under the terms of the will the widow is only given a life estate, with only a limited power of invasion and no power to dispose of the corpus during her life or at death * * *.
The respondent contends that the bequest to the decedent's wife is of a terminable interest within the meaning of section 812 (e) (1) (B), and is, therefore, an interest for which no marital deduction is allowable.
The decedent's widow received only a life estate, with remainders over to named individuals. Her interest will terminate upon her *968 death and the remaindermen will thereafter receive the property. The wife's interest is a terminable interest which is*138 excluded from the allowance of a marital deduction by subsection (B) of section 812 (e) (1). See sec. 81.47 b (d) of Regs. 105. This is true even though the decedent's will gave the widow the power to use so much of the corpus of the estate as she might need to maintain the way of life to which she and the decedent had been accustomed. In re Potter's Estate, 231 N. Y. S. 355. 1
Assuming that the widow has the right to invade the corpus of the estate (which the respondent questions), such power does not convert the life estate into an absolute fee. See Terry v. Wiggins, 47 N.Y. 512">47 N. Y. 512; and In re Brower's Estate, 104 N. Y. S. 2d 658. These cases hold that where the decedent names remaindermen to take *139 the unconsumed estate, a life tenancy exists even though there is a power to invade corpus.
It is held that the interest passing to the surviving spouse in the decedent's estate is a terminable interest within the meaning of section 812 (e) (1) (B) of the Code. It follows that no marital deduction therefor is allowable.
Recomputation of the deficiency is necessary.
Decision will be entered under Rule 50.
Footnotes
1. In Potter's Estate↩, the decedent's will gave the widow the use of the income of decedent's property and as much of the principal as she needed for her support. It was held that the widow had only a life estate.