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postdeath events warrant consideration where the decedent's
creditor has only a potential, unmatured, contingent, or
contested claim which requires further action before it becomes a
fixed obligation of the estate. Estate of Van Horne v.
Commissioner, supra at 735. Where a claim is disputed,
contingent, or uncertain as of the date of the decedent's death,
the estate is not entitled to a deduction until the claim is
resolved and it is determined what amount, if any, will be paid.
It is this latter amount that is allowed as a deduction. See,
e.g., Propstra v. United States, 680 F.2d 1248, 1253 (9th Cir.
1982); Estate of Taylor v. Commissioner, 39 T.C. 371, 375 (1962),
affd. sub nom. Gowetz v. Commissioner, 320 F.2d 874 (1st Cir.
1963); Estate of Cafaro v. Commissioner, T.C. Memo. 1989-348.
In Estate of Cafaro v. Commissioner, supra, for instance,
the taxpayer claimed several deductions pursuant to section
2053(a)(3) which exceeded the amounts for which the estate
ultimately settled the claims in issue, and the Commissioner
disallowed these deductions to the extent they exceeded the
amounts of the settlements.9 This Court found that the
settlement of the claims "indicates that, rather than being a
8(...continued)
review all these prior cases in order to resolve the instant
case.
9One claim was settled before the taxpayer filed its Federal
estate tax return, while the other was settled after the return
had been filed. Estate of Cafaro v. Commissioner, T.C. Memo.
1989-348.
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