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On brief, petitioner contends that the gross estate is not
increased by the amount of its section 1341(a) relief, because
decedent's right to such relief did not exist at the time of her
death on November 16, 1990. Petitioner maintains that it was not
entitled to any section 1341(a) relief until it repaid Exxon
pursuant to the terms of the February 10, 1992, settlement
agreement. This agreement was not entered into until almost 15
months after decedent's death. Respondent, on the other hand,
argues that petitioner's section 1341(a) relief necessarily
augments the gross estate. Neither party has cited, nor have we
found, any case law squarely on point.
In support of his position, respondent relies on the
decision of the District Court for the Eastern District of
Michigan in Estate of Good v. United States, 208 F. Supp. 521
(E.D. Mich. 1962). In Estate of Good, the decedent had been
overpaid by his employer in salary and expense reimbursements.
These amounts were reported by decedent on his income tax returns
for the years received. The employer notified the decedent that
he would be liable for repayment and filed a claim against the
decedent's estate when the decedent died prior to repayment.
15(...continued)
1341(a) relief is limited to the amount paid to settle Exxon's
claim against decedent individually; petitioner is not entitled
to sec. 1341(a) relief for amounts paid in satisfaction of
Exxon's claims against Jessamine and Frankie. The parties also
appear to agree that a credit pursuant to sec. 1341(a)(5) would
provide petitioner a greater benefit than a deduction under sec.
1341(a)(4).
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