- 21 - months later, the Association's bylaws were amended to permit the settlement of outstanding claims for less than the full amount owed. The estate ultimately settled the claim for less than the amount originally sought (and reported by the estate on its return). Id. at 1250. The Court of Appeals for the Ninth Circuit found that the Association's lien claims were certain and enforceable when the decedent died. The Court of Appeals noted that at the time of the decedent's death, the Association lacked the authority to settle claims for less than their full amount. In addition, the estate lacked even a colorable defense against the Association's claims. The Court of Appeals ruled that "when claims are for sums certain and are legally enforceable as of the date of death, post-death events are not relevant in computing the permissible deduction." Id. at 1254. The estate was entitled, therefore, to a deduction for the claim in the amount reported on its estate tax return. Petitioner's reliance on Propstra is misplaced. In Propstra, the Court of Appeals explained that the threshold determination to be made under section 2053(a)(3) is whether the claim in question was certain and enforceable at the time of the decedent's death. See id. at 1253. The Court of Appeals precluded consideration of postdeath events only where a claim was found to be certain and enforceable on the date of death. Id. at 1254; see also Estate of Van Horne v. Commissioner, 720Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Next
Last modified: May 25, 2011