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all claims presented by the parties with respect to the
litigation were dismissed.
Discussion
The first issue we must decide is whether petitioner is
entitled to a deduction pursuant to section 2053(a)(3) in the
amount reported on the estate tax return ($2,482,719.00) or in
the amount ultimately paid to Exxon in settlement of the relevant
claim ($681,839.60). To do so, we must determine whether events
subsequent to the date of decedent's death are to be taken into
account in establishing the amount of the deduction to which
petitioner is entitled.
The Internal Revenue Code imposes a Federal estate tax on
the transfer of the taxable estate of a decedent who is a citizen
or resident of the United States. Secs. 2001 and 2002. Section
2053(a)(3) allows a deduction from the gross estate for claims
against the estate that are allowable by the laws of the
jurisdiction under which the estate is administered. Section
20.2053-4, Estate Tax Regs., provides that "The amounts that may
be deducted as claims against a decedent's estate are such only
as represent personal obligations of the decedent existing at the
time of his death * * * Only claims enforceable against the
decedent's estate may be deducted." Section 20.2053-1(b)(3),
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