Estate of Gordon B. McLendon, Deceased, Gordon R. McLendon, Jr., Independent Executor - Page 5

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          part and remanding the case to this Court.  In particular, the              
          Court of Appeals reversed our decision that the property                    
          interests transferred by decedent should be valued as partnership           
          interests after concluding that we failed to characterize the               
          annuity transaction as a “contrivance to avoid estate taxes” or a           
          “sham”.  Estate of McLendon v. Commissioner, 77 F.3d 477 (5th               
          Cir. 1995), revg. in part and remanding without published opinion           
          T.C. Memo. 1993-459 (slip op. at 17-18).  Further, the Court of             
          Appeals remanded the case to this Court with instructions to                
          explain our holding sustaining respondent's determination that              
          petitioner improperly relied upon the actuarial tables under                
          section 25.2512-5(f) (Table A), Gift Tax Regs., in computing the            
          value of the remainder interest that decedent transferred                   
          pursuant to the private annuity agreement.  The Court of Appeals’           
          opinion states in pertinent part:                                           
                    Although the Tax Court purported to compare                       
               Gordon's health as of March, 1986 with that of parties                 
               in other cases, e.g. in [Estate of Jennings v.                         
               Commissioner, 10 T.C. 323 (1948) and Estate of Hoelzel                 
               v. Commissioner, 28 T.C. 384, 389 (1957)], we are                      
               unable to discern whether the Tax Court followed                       
               Revenue Ruling 80-80, [1980-1 C.B. 194] or found reason                
               to depart from it.  The Tax Court's opinion is both                    
               ambiguous and ambivalent regarding the revenue ruling,                 
               as it holds that Gordon had a life expectancy of one                   
               year, a finding that would suggest to us under the                     
               express language of the revenue ruling that death was                  
               not clearly imminent.  We must remand for the court to                 
               clarify its conclusion with regard to the applicability                
               of Revenue Ruling 80-80 so that we will have a sounder                 
               basis for appellate review. [Estate of McLendon v.                     
               Commissioner, 77 F.3d at 477 (slip. op. at 24).]                       

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