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Respondent determined that petitioner's gross estate included
100 percent of the proceeds from three life insurance policies
and the undiscounted value of two parcels of real property.
Petitioner filed a petition for redetermination in the Tax Court.
The Tax Court decided that petitioner's gross estate
included 100 percent of the proceeds from the life insurance
policies and that a 20-percent discount applied in valuing the
properties. Estate of Cervin v. Commissioner, T.C. Memo. 1994-
550, revd. and remanded 111 F.3d 1252 (5th Cir. 1997). We denied
petitioner's motion for litigation costs under section 7430.
Petitioner appealed, asserting that only 50 percent of the
life insurance proceeds should be included in decedent's gross
estate and claiming entitlement to an award of reasonable
litigation costs under section 7430. The Court of Appeals for
the Fifth Circuit determined that petitioner had substantially
prevailed with respect to the amount in controversy and that the
position of the United States with respect to the insurance
proceeds and the property valuation was not substantially
justified. The Court of Appeals held for petitioner with respect
to the life insurance proceeds and award of litigation costs and
remanded the case to the Tax Court for a determination of
reasonable litigation costs. Estate of Cervin v. Commissioner,
supra.
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