Buckmaster v. United States

Daisy Murphy died in 1984. Her will split her estate between her niece, Sylvia Buckmaster (plaintiff), and her nephew, Jesse Murphy. Jesse served as executor. The estate included mineral rights that continued to earn royalties during administration of the estate. In a tax year ending on January 31, 1985, Jesse distributed $437,000 of estate income, splitting it between himself and Buckmaster, with the estate taking a deduction for this amount on the estate’s income-tax return. During the following year, the estate distributed the remaining $155,649.51 and again claimed similar deductions. Daisy’s will never explicitly directed such payments. The probate court handling Daisy’s estate never explicitly authorized the payments but did subsequently issue an order of final settlement, approving all actions of the personal representative. The government (defendant) subsequently disallowed those deductions on the estate’s income-tax returns, at which time the probate court issued a nunc pro tunc order explicitly confirming its approval of the distributions made by Jesse. Nevertheless, the government issued a deficiency assessment, which disallowed the deductions because the probate court had not approved either set of payments before they were made. After suit was filed, the district court ruled for the government, and Buckmaster appealed.