Rev. Rul. 55-87

Advice has been requested whether the lump sum payment received by the executors or administrators of the estate pursuant to section 202(i) of the Social Security Act, as amended, Public Law 269, Eighty-third Congress, approved August 14, 1953, 67 Stat. 580, 42 U.S.C. 402(i), is includible in the decedent's gross estate for Federal estate tax purposes.

Section 2033 of the Internal Revenue Code of 1954 (section 811(a) of the 1939 Code) provides as follows:

The value of the gross estate shall include the value of all property (except real property situated outside of the United States) to the extent of the interest therein of the decedent at the time of his death.

Section 202(i) of the Social Security Act, as amended, provides in part as follows:

Upon the death, after August 1950, of an individual who died a fully or currently insured individual, an amount equal to three times such individual's primary insurance amount shall be paid in a lump sum to the person, if any, determined by the Administrator to be the widow or widower of the deceased and to have been living with the deceased at the time of death. If there is no such person, or if such person dies before receiving payment, then such amount shall be paid to any person or persons equitably entitled thereto, to the extent and in the proportions that he or she shall have paid the expenses of burial of such insured individual. * * *.

Examination of the nature of the payments under the above-quoted section of the Social Security Act discloses that the decedent had no control over the designation of the beneficiary or the amount of the payment since these are fixed by the statute. Furthermore, the decedent had no property interest in the `Federal Old Age and Survivors Insurance Trust Fund' from which the payment is made.

In view of the foregoing, it is held that the lump sum death payment received by the executors or administrators of the estate of the decedent under Title II of the Social Security Act, as amended, does not constitute property of the decedent at the time of his death within the meaning of section 2033 of the Internal Revenue Code of 1954. Accordingly, the lump sum death payment is not includible in the decedent's gross estate for Federal estate tax purposes. Compare E.T. 10, C.B. 1937-2, 469, and E.T. 18, C.B. 1940-2, 285