Publication Date
1969
Abstract
An important' tax question arises when income is received by a decedent's successor in interest as a result of a sale transaction which had its origins in the decedent's lifetime activities but which was not consummated until after his death. The answer to be sought is whether or not the proceeds of the sale constitute income in respect of a decedent within the meaning of section 6913 of the Internal Revenue Code of 1954. If so, the successor in interest will include in gross income the same amount as the decedent would have included had he completed the sale and received the proceeds during his lifetime. If not, the property which was the subject of the sale will receive a stepped-up basis equal to its fair market value as of the date of the decedent's death or as of the alternative valuation date. Consequently, in most instances the taxable gain on the disposition, if any, would be minimal.
The problems which have emerged in this area stem primarily from Congress' failure to define adequately the term "income in respect of a decedent." The responsibility for giving some meaning to the term consequently has fallen on the courts. However, the cases which have arisen under section 691 have failed to yield any uniform test or standards to apply in such situations. The result has been both confusion and, not surprisingly, much criticism of judicial effectuation of the provision. To facilitate an understanding of the existing problems and possible alternatives the logical starting place is a history of section 691.
Recommended Citation
T., G. S.
(1969)
"Sales Transactions and Income in Respect of a Decedent,"
Georgia Law Review: Vol. 3:
No.
3, Article 6.
Available at:
https://digitalcommons.law.uga.edu/glr/vol3/iss3/6