The Widow\u27s Election in California: Is She a Purchaser or a Beneficiary

In United States v. Gist the taxpayer\u27s deceased husband had left a will directing that both his and his wife\u27s shares of their community property be transferred to a trust, income from which was payable to the taxpayer for life, remainder to their children. The taxpayer claimed an amortization deduction for the cost basis of her life income interest on the theory that she had purchased this interest in exchange for the remainder interest in her share of the community property. The Ninth Circuit agreed, thereby perpetuating the confusion which abounds in applying contractual concepts of consideration throughout the law of taxation. The court rejected the Government\u27s contention that the taxpayer should be characterized as a beneficiary, rather than a purchaser, of the interest in question