In the case of Commissioner of Internal Revenue v. Estate of Church, 1948, the U.S Supreme Court was tasked with deciding whether or not a charitable remainder trust could be deducted from an estate's gross value for tax purposes. The decedent had left his entire estate to a trust that provided life income to certain individuals and then distributed the remaining assets to charity upon their deaths. The IRS argued that this donation should not be deductible since it was contingent on how long these beneficiaries lived - thus making it impossible to determine its present value at the time of death. The court ruled in favor of Church’s estate, holding that such donations are indeed deductible under Section 812(d) of the Internal Revenue Code as interpreted by Treasury Regulations 105 section 81.44(b). This decision established precedent for future cases involving similar circumstances; allowing estates with charitable remainder trusts to deduct them from their gross values when calculating federal taxes due.

In the dissenting opinion for Commissioner of Internal Revenue v. Estate of Church, Justice Jackson disagreed with the majority's interpretation that a reversionary interest should be included in gross estate valuation under Section 811(c) of the Internal Revenue Code. He argued that this section was intended to prevent tax evasion by including transfers where possession or enjoyment can only be obtained after death, not to include interests retained by donors during their lifetime. Furthermore, he contended that if Congress had intended such an inclusion it would have been explicitly stated in legislation as it is a significant departure from traditional principles and practices regarding property rights and taxation. Therefore, according to him, Mrs.Church’s life estate did not qualify as a transfer because she retained control over her assets until her death; thus no taxable event occurred during her lifetime which could trigger federal gift tax liability.