The most recent of the marital deduction decisions involving the payment of a dower equivalent in cash is Dougherty v. United States, 6th Cir., 1961, 292 F.2d 331. The district court had held that the amount paid as a commutation of dower pursuant to an equity decree did not qualify for the marital deduction, pointing out that no showing was made that there could not be a division of the property in kind. Dougherty v. United States, D.C.E.D.Ky. 1959, 175 F. Supp. 339. The Court of Appeals for the Sixth Circuit reversed and decided that the marital deduction should be allowed. The Crosby case of this Court was relied upon.
060, Kentucky Revised Statutes, rather than separately, the property was not susceptible of division. Dougherty v. United States, 175 F. Supp. 339, 342, D.C.E.D.Ky. Considering first Section 392.
The Court of Appeals reversed, saying: 175 F. Supp. 339. "`The basic principle * * * is that the spouse first to die shall be permitted to pass on to the surviving spouse free of estate tax up to one-half of his or her estate, provided only that the terms of the transfer are such that this property will be taxable in the estate of the surviving spouse.' Estate of Pipe v. Commissioner, 23 T.C. 99, 104. Under this construction of the Act, we are more concerned with what the widow actually received in the settlement of her husband's estate than with what she was technically entitled to receive but actually did not receive. The transaction is materially different from an allotment of dower in the settlement of the estate and a subsequent sale by her of such allotment."