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§ 8.3 FEDERAL ESTATE TAXCharitable Estate Tax Deduction. A charitable estate tax deduction 99 generallyis allowed for the value of all estate transfers of the decedent to or for the use ofthe following organizations:• The United States, any state (including the District of Columbia), andpolitical subdivisions thereof for exclusively public purposes• Organizations organized and operated exclusively for religious, charitable,scientific, literary, or educational purposes; to foster amateur sports competition(but not athletic facilities or equipment); to encourage art; or for theprevention of cruelty to children or animals (no net earnings to privateshareholders or individuals, and not a disqualified organization forattempted legislative influence, and no participation in political campaigns)• Fraternal societies for use exclusively for religious, charitable, scientific,literary, or educational purposes, including encouragement of art or theprevention of cruelty to children or animals (not a disqualified organizationfor attempted legislative influence and no participation in politicalcampaigns)• Veterans’ organizations organized by act of Congress, or their departmentsor local chapters or posts (no net earnings to private shareholder orindividual)From time to time, the IRS issues rulings as to whether a transfer of moneyor property qualifies for the federal estate tax charitable deduction. 100The charitable deduction is disallowed in certain cases. Transfers to certaincharitable organizations subject to the termination tax applicable with respect toprivate foundations, 101 or to charitable organizations that are no longer taxexempt,102 do not enjoy the charitable contribution deduction. Generally, a transferof a split interest in property to a charity is not entitled to a charitable estatetax deduction when an interest in the same property is transferred to a person,or for a use, other than the charitable uses described above. 103Another context in which the estate tax charitable deduction may be disallowedis in connection with amounts paid to a charitable organization pursuantto the settlement of a will. Deductibility of the payments is not determined onthe basis of a good faith adversary proceeding. Rather, the appropriate inquiry is99 IRC § 2055(a). In computing the amount of property passing to a charitable organization as the result of a residualbequest, for estate tax charitable contribution deduction purposes, the gift taxes paid by the decedent arenot treated as passing to charity; lawyers’ and accountants’ fees incurred during administration of the estateare deducted from the value of the trust principal. Tech. Adv. Mem. 9351001.The IRS ruled that the transfer of land from an estate to a charitable organization gave rise to an estate taxcharitable deduction, even though the land could not yet be used for its intended charitable purposes (museumand gardens open to the public) because the organization was having political difficulties securing the requisitelocal use permit. The charitable organization would, in the interim, be conducting another type of charitableactivity⎯namely, the preservation and maintenance of an historically significant property. Priv. Ltr. Rul.200116007. See § 3.3(b)(i), (ii).100 See, e.g., Priv. Ltr. Rul. 200418002.101 IRC § 508(d).102 IRC § 4948(c)(4).103 IRC § 2055(e). The estate tax charitable deduction may also be disallowed when the donee fails to qualify asa charitable entity. See § 8.7(a). 239