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amount in excess being paid by Thomas; (2) for purposes of the
agreement, the value of the residence was to be $750,000; and (3)
the residence would be distributed to Thomas, and John would
receive other assets valued at $375,000 (representing one-half
the value of the residence). During 1995, Chubb paid a total of
$1,122,606 to decedent’s estate, which was characterized by Chubb
as being for the following purposes: Landscaping $19,200.53,
code upgrades $124,859.55, building $890,039.89, and contents
$88,506.17. After decedent’s death, the estate paid
$1,030,378.44 to Krueger.
Prior to the completion of the residence, the county
government assessed it as new construction property with an
assessment value of $806,175 for the 1995-96 tax year and
$836,275 for the 1996-97 tax year. The gross estate included
$732,773 as an amount due from Chubb as potential reimbursement
after the completion of the restoration. The gross estate was
reduced by $795,440 and $53,075, or a total of $848,515,
representing the amount that would be due to Krueger if it was
decided to proceed with construction to restore the residence and
Krueger completed the work.
An appraisal attached to the estate tax return reflected the
value of the partially (57 percent) constructed residence at
$612,000, the amount that was included in the gross estate. Many
of the homes that were rebuilt after the Oakland Hills fire were
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Last modified: May 25, 2011