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We are not convinced that there was a "genuine and
active contest" in the probate court or that the order of
the probate court constitutes "a decision of a local court
upon the merits in an adversary proceeding", so as to
trigger the presumption set forth in the above regulation.
Sec. 20.2056(e)-2(d)(2), Estate Tax Regs. In this
connection, it is significant that the guardian ad litem
stated during the hearing before the probate court that a
"benefit" would be realized by the entire Rapp family if
the estate tax of approximately $2 million were postponed
until Mrs. Rapp's death. He stated as follows:
Under those circumstances the benefit to
the entire family, the entire estate, by post-
poning the tax until the surviving spouse dies,
I believe is also a benefit on the person I have
been appointed to represent.
We do not accept petitioner's assertion that the
investigation conducted by the executor proves that the
proceeding before the probate court was adversarial in
nature. To the contrary, it is equally likely that the
executor's investigation was undertaken to justify
petitioner's position before this Court in order to obtain
the "benefit" of postponing the estate tax.
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