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Respondent disallowed the estate's $1,486,000 deduction for
the claim of Ms. Trompeter. Respondent argues primarily that a
genuine controversy did not exist between Ms. Trompeter and the
estate, and that the estate claimed the deduction solely to
reduce its estate tax liability. Respondent contends that the
estate challenged the claim in probate court to create the
appearance of a valid claim, and that Ms. Trompeter's complaint
in superior court was a sham. Respondent contends that the
superior court's consent decree approving the purported
settlement was not on the merits of her claim. Alternatively,
respondent argues, even if the estate and Ms. Trompeter were
involved in a real controversy, the estate has not proven that
Ms. Trompeter's claim was allowable under applicable State law.
Respondent contends that the record does not show that coins were
withheld from her during the divorce proceeding, which is the
linchpin of her claim. The estate concedes that its original
computation of the deduction for Ms. Trompeter's claim was wrong,
and that subsequent recomputations are less than the reported
amount. The estate asserts that it is entitled to a deduction of
$682,025.
We agree with respondent's result on this issue. For
purposes of computing a taxable estate for Federal estate tax
purposes, an estate may deduct certain claims against it that are
allowable "by the laws of the jurisdiction * * * under which the
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