Estate of Alto B. Cervin, Deceased, Bennett W. Cervin, Executor, and Nita-Carol Cervin Miskovitch, Executor - Page 3

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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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