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Natl. Bank v. Commissioner, supra, and the cases cited therein
(including our opinion in Estate of Jennings v. Commissioner, 10
T.C. 323 (1948)), we concluded:
The common theme of these cases is that the
actuarial tables generally are to be respected unless
the established facts show that the result under the
tables is unrealistic or unreasonable. Consistent with
the Estate of Jennings line of cases, the proper
inquiry in this case is whether the life tenant's
actual life expectancy is so exceptional that a
departure from the actuarial tables is justified.
While the term “exceptional” is difficult to define,
Estate of Jennings and its progeny require proof that
death is either imminent or predictable to a reasonable
certainty within 1 year of the valuation date. [Estate
of McLendon v. Commissioner, 66 TCM (CCH) at 967, 64
TCM (RIA) at 2459; emphasis added.]
In applying the foregoing standard to the facts as we found
them, we concluded as follows:
In sum, the record as a whole paints a picture of
an increasingly sick man suffering from a virtually
incurable disease. Although Gordon's physical
condition fluctuated from day to day, the overall trend
was one of fairly rapid deterioration. Under the
circumstances, we conclude that it was evident to all
involved that Gordon was not likely to survive more
than 1 year from March 5, 1986.21 In light of Gordon's
diminished actual life expectancy on the date that the
private annuity agreement was executed, we hold that it
was improper for Gordon to compute the value of the
remainder interest in question under section 25.2512-
5(f) (Table A), Gift Tax Regs. Rather, the remainder
interest is properly valued based on Gordon's actual
life expectancy as of March 5, 1986, which we hold to
be 1 year. [Estate of McLendon v. Commissioner, 66 TCM
(CCH) at 968, 64 TCM (RIA) at 2460.]
_____________
21Given contemporary advances in medicine and the
ability to sustain life, we recognize that it is
increasingly difficult to predict actual life
expectancy with a high degree of certainty. We respect
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