Estate of Gordon B. McLendon, Deceased, Gordon R. McLendon, Jr., Independent Executor - Page 11

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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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