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Harper deals with an entirely different situation than that
present here. Our decision in Harper is consistent with Ahmanson
Foundation, supra, which states:
We must distinguish, however, the effect of
"predistribution" transformations and changes in value
brought about by the testator's death, from changes in
value resulting from the fact that under the decedent's
estate plan the assets in the gross estate ultimately
come to rest in the hands of different beneficiaries.
[Ahmanson Foundation v. United States, 674 F.2d at
768.]
The estate tax is a tax on the privilege of passing on property,
not a tax on the privilege of receiving property. "The tax is on
the act of the testator not on the receipt of the property by the
legatees." Ithaca Trust Co. v. United States, 279 U.S. 151, 155
(1929). Unlike Harper, petitioner's case does not involve a
change in value resulting from the distribution of decedent's
estate.
In Goodman v. Granger, 243 F.2d 264 (3d Cir. 1957), the
court evaluated three employment contracts carrying "contingent
benefits" of $2,000 annually for 15 years after the employee
ceased to be employed by the employer by reason of death or
otherwise. The post-employment contingent payments were to be
made only if the employee did not engage in any competing
business for a certain period of time and if his post-employment
earnings from other work did not exceed a certain amount. The
court held that since the possibility of forfeiture was
extinguished by the decedent's death the contract rights should
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