Note:
Gary C. Johnson, Income Tax—Section 1033—Acquisitions by a Surviving Spouse With Her Own Funds Do Not Effectuate a Replacement of Property for Purposes of Deferring Gain Under a Section 1033 Election Made by Her Deceased Husband: Estate of George W. Wayne, 61 T.C. 744 (1974), appeal dismissed.—F.2d—(7th Cir. 1975), 53 Texas L. Rev. 1077 (1975).
 

Abstract:
Decedent sold property under threat of condemnation and on his joint tax return elected under section 1033 of the Internal Revenue Code to defer recognition of the gain realized on the sale, but he died before completing the replacement of the property. Prior to his death, decedent had changed certificates of deposit representing most of the conversion proceeds from sole ownership by him to joint ownership with petitioner, his surviving spouse and the executrix of his estate. The certificates passed to petitioner by operation of law at the decedent’s death, and she used them to complete replacement of the property. The Commissioner of Internal Revenue assessed a deficiency for the previously unrecognized gain, asserting that petitioner’s acquisitions failed to perfect her husband’s section 1033 election. Petitioner attacked the Commissioner’s determination in the Tax Court. Affirmed. Acquisitions of property by a surviving spouse with her own funds do not effectuate a replacement of property for purposes of deferring gain under a section 1033 election made by her deceased husband.