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§ 8.3 FEDERAL ESTATE TAXproperty to the extent of the interest therein of the decedent at the time of his [orher] death.” 79If the federal estate tax or any state inheritance (or succession, legacy, orestate) tax is payable out of charitable bequests, legacies, or devises, the estatetax charitable contribution deduction is confined to the amount of the bequests,legacies, or devises reduced by the amount of the taxes. 80 When this rule applies,an interrelated calculation is required to determine the amount of the allowablededuction. 81 Generally, the manner in which death taxes are apportioned to theassets that constitute a decedent’s gross estate is governed by state law. 82 Thelaw may provide that if a will specifies an estate-tax apportionment method differentfrom the method provided by statute, the method specified in the willcontrols. In a case involving such a law, the death taxes and other bequests,debts, and expenses of the decedent that were paid by the residuary estateexhausted the residuary estate. Thus, no probate assets were available for allocationto the charitable bequest, so the deduction was significantly reduced. 83The gross estate encompasses a broad spectrum of property. The gross estateincludes within its reach the probate estate, contractual payments (such as insurance),and jointly titled property. In addition to the broad sweep of the grossestate given by its statutory definition, the federal estate tax law provides forother specific inclusions in the gross estate. Included within the gross estate are:• Dower or curtesy interests• Certain transfers within three years of death• Retained life estates• Transfers taking effect at death• Revocable transfers• Annuities• Joint interests• Powers of appointment• Life insurance• Transfers for insufficient considerationThere are basic policy reasons for inclusion of these property interests in thedecedent’s estate. The decedent retains (as a matter of law) significant beneficialinterests in property of this type. Therefore, the decedent should be treated asthe owner for purposes of imposing the estate transfer tax. When the retainedpowers and control over property are such that the decedent has the ability toaffect the beneficial use and enjoyment of property during life, or upon death,particularly with respect to transferring such interests, the decedent can in allfairness be treated as though he or she were the owner of such property. As a79 IRC § 2033.80 IRC § 2055(c).81 Reg. § 20.2055-3(a)(2).82 See, e.g., Riggs v. Del Drago, 317 U.S. 95 (1942).83 Bradford Estate v. Commissioner, 84 T.C.M. (CCH) 337 (2002). 235