Vanderbilt Law Review

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The leading articles in this symposium stress the problems which federal death duties create in the planning of estates. The purpose of this note is to discuss the Tennessee Inheritance Tax,' and to indicate how its treatment of particular types of property and forms of ownership differs from the federal succession tax.

The federal tax poses no problem to the Tennessean of moderate means in planning his estate. By some elementary advance planning, all but very substantial estates may be made free of federal tax. In no event will an estate be subject to federal tax which is valued at less than $60,000 after authorized deductions. This specific exemption of $60,000 is now only the starting point. The Revenue Act of 1948 has included an additional deduction where property passes to a surviving spouse. By use of this "marital deduction" there is a splitting of ownership for estate tax purposes.

A similar drastic change was made in the federal gift tax. Under prior law the donor could make annual gifts of $3,000 to any number of donees. In addition to these annual exclusions, the donor had a specific exemption of $30,000. This amount could be given in any one year or spread over several years. The 1948 Act has provided that a married donor under certain circumstances may avail himself of his spouse's exemptions and exclusions. This doubles the amount of property of which such donor may divest himself free of tax.