- 22 -
F.2d at 1116-1117. Moreover, the Court of Appeals acknowledged
that "The law is clear that post-death events are relevant when
computing the deduction to be taken for disputed or contingent
claims." Propstra v. United States, supra at 1253.
The validity and enforceability of Exxon's claim against
decedent in the instant case were uncertain as of the date of her
death. As a result, we hold that petitioner's section 2053(a)(3)
deduction in connection therewith is limited to the amount
ultimately paid in settlement of that claim. Thus, we sustain
respondent's determination.13
The next issue for decision is whether the income tax
benefit derived by petitioner as a result of the application of
section 1341(a) is an asset includable in the gross estate.
Section 2031(a) provides that "The value of the gross estate of
the decedent shall be determined by including to the extent
provided for in this part, the value at the time of his death of
all property, real or personal, tangible or intangible, wherever
situated." Section 2033 provides that "The value of the gross
estate shall include the value of all property to the extent of
the interest therein of the decedent at the time of his death."
In the instant case, the parties have stipulated that all HFU
royalties paid to decedent from Exxon for the calendar years 1975
13Given our disposition of this issue, we need not consider
respondent's alternative argument that petitioner must recognize
discharge of indebtedness income pursuant to sec. 61(a)(12) in
connection with petitioner's settlement of Exxon's claim.
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