Estate of Gordon B. McLendon, Deceased, Gordon R. McLendon, Jr., Independent Executor - Page 6

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               Section 25.2512-5, Gift Tax Regs., provides actuarial tables           
          to be used in computing the present value of an annuity, life               
          estate, remainder, or reversion transferred after November 30,              
          1983, and before May 1, 1989.                                               
               The actuarial tables referred to above are                             
               provided as an administrative necessity and their                      
               general use has been approved by the courts.  Simpson                  
               v. United States, 252 U.S. 547, 550-551 (1920); Estate                 
               of Fabric v. Commissioner, 83 T.C. 932, 941 (1984).                    
               The actuarial tables regularly are applied in valuing                  
               contingent property interests given that they "afford a                
               reasonable norm and some degree of certainty in                        
               ascertaining the value of property and the consequent                  
               tax liabilities of the beneficiaries thereof."  Miami                  
               Beach First Natl. Bank v. United States, 443 F.2d 116,                 
               119 (5th Cir. 1971).                                                   
               Nonetheless, the courts have long recognized that                      
               the actuarial tables should not be applied in those                    
               "exceptional cases" where the result would be                          
               unreasonable.  Id. at 120; Estate of Lion v.                           
               Commissioner, 438 F.2d 56, 61 (4th Cir. 1971), affg. 52                
               T.C. 601 (1969); Weller v. Commissioner, 38 T.C. 790,                  
               803 (1962).  The party seeking to eschew the actuarial                 
               tables bears the burden of proving that the                            
               circumstances justify a departure from the norm.  Bank                 
               of California v. United States, 672 F.2d 758, 759-760                  
               (9th Cir. 1982); Continental Ill. Natl. Bank & Trust                   
               Co. v. United States, 504 F.2d 586, 594 (7th Cir.                      
               1974); Weller v. Commissioner, supra. [Estate of                       
               McLendon v. Commissioner, 66 TCM (CCH) at 964, 64 TCM                  
               (RIA) at 2456.]                                                        
          As our survey of the case law in our earlier Memorandum Opinion             
          reveals, there has been a substantial amount of litigation                  
          involving the question of the circumstances that would justify a            
          departure from the actuarial tables.                                        

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