Estate of Robert E. Cartwright, Deceased, Dorothy G. Cartwright, Executrix - Page 10

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               On October 12, 1989, petitioner filed a Form 1041, U.S.                
          Fiduciary Income Tax Return, for 1988.  Petitioner did not                  
          include the insurance proceeds in its taxable income.  Petitioner           
          attached a statement to the return which said that the insurance            
          proceeds were consideration for the purchase of decedent's stock            
          in CSB.  In the notice of deficiency, respondent determined that            
          $4,080,256 of the payment was compensation and that petitioner              
          has a deficiency of $1,142,472.                                             
                                       OPINION                                        
          A.   Whether CSB Paid Life Insurance Proceeds to Decedent's                 
               Estate Solely To Redeem His CSB Stock                                  
               Petitioner contends that the 1988 amendment fixed the                  
          redemption price of decedent’s stock at $5 million.  Respondent             
          contends that $1,043,733 of the insurance proceeds was paid for             
          decedent's CSB stock and that $3,956,267 was paid for cases or              
          work in process.6                                                           
               We consider the intent of the parties as shown in their                
          written agreements in deciding whether a payment from a                     


               5(...continued)                                                        
          we are not required to decide this case consistently with                   
          respondent's tax treatment of CSB.  See Ginsburg v. United                  
          States, 184 Ct. Cl. 444, 396 F.2d 983 (1968); Estate of Bette v.            
          Commissioner, T.C. Memo. 1977-404.                                          
               6 Respondent's position assumes that CSB paid $5 million               
          to decedent's estate.  CSB paid $5,062,029 to decedent’s estate,            
          $62,029 of which was for premium adjustments and interest and               
          is not in dispute.  We treat this as respondent's concession that           
          $62,029 (in addition to $1,043,733) was paid to redeem decedent's           
          stock.                                                                      




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