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estate was not an Affiliate and pursuant to S.E.C. Rule 144 could
freely sell the shares without regard to such restrictions.
The Court of Appeals in United States v. Land, 303 F.2d at
172, emphasized the fact that the Federal estate tax is imposed
on the transfer of property, and reasoned that from this it
follows that the valuation of the estate should be made at the
time of transfer; i.e., the "instant of death". Since in the
instant case the securities law restrictions evaporated at the
moment of death, we hold that the shares must be valued free of
the restriction, at $15.56 per share.
As we have previously noted, petitioner makes two additional
arguments. Petitioner emphasizes that the securities law
restrictions were not, through some contrivance, self-imposed by
decedent. Consequently, petitioner says, no potential abuse is
involved, and the estate should therefore receive the tax benefit
of the limitation on value during decedent's lifetime. We would
simply respond by agreeing that in some instances it becomes
necessary to look through form to substance where a decedent was
in a position during his/her lifetime to manipulate the future
value of an asset at death. We believe, however, that in the
absence of atypical circumstances, not present here, the "instant
of death" rule enunciated in United States v. Land, supra, and as
we have applied it, is an objective test where the question of
intent--inherent in contrived value situations--is not relevant.
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