Estate of Charles K. McClatchy, Deceased, William K. Coblentz and James McClatchy, Personal Representative - Page 13

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          be given their full value for estate tax purposes.  In reaching             
          this conclusion the court observed that                                     
                    Since death is the propelling force for the                       
               imposition of the tax, it is death which determines the                
               interests to be includible in the gross estate.                        
               Interests which terminate on or before death are not a                 
               proper subject of the tax.  Assets may be acquired or                  
               disposed of before death, possibilities of the loss of                 
               an asset may become actualities or may disappear.  Upon                
               the same principle underlying the inclusion of                         
               interests in a decedent's gross estate, valuation of an                
               interest is neither logically made nor feasibly                        
               administered until death has occurred.  The taxpayer's                 
               theory of valuing property before death disregards the                 
               fact that generally the estate tax is neither concerned                
               with changes in property interests nor values prior to                 
               death.  The tax is measured by the value of assets                     
               transferred by reason of death, the critical value                     
               being that which is determined as of the time of death.                
               [243 F.2d at 268-269; emphasis supplied.]                              
          In a footnote to Goodman v. Granger, the court also observed that           
          the result reached in Estate of Harper v. Commissioner, 11 T.C.             
          717 (1948), is consistent with "our approach in the instant case,           
          although the language used by the Tax Court was perhaps something           
          less than fortunate."  [243 F.2d at 269, fn. 7.]                            
               When the foregoing reasoning is applied to this case, it is            
          apparent that the stock at issue must be valued without the                 
          S.E.C. Rule 144 restrictions.  The decedent was considered an               
          Affiliate for securities law purposes at the time of his death              
          and therefore pursuant to S.E.C. Rule 144, he was subject to                
          stringent volume limitations, disclosure, and other requirements            
          if he were to dispose of the shares.  This stock was transferred            
          at the moment of death and passed to the decedent's estate.  The            




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