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estate is being administered". Sec. 2053(a). Claims are
deductible if they are based on the personal obligation of the
decedent at the time of his or her death. Sec. 20.2053-4, Estate
Tax Regs. A liability arising out of tort is an example of a
claim that is deductible under section 2053(a).
The issue here is whether Ms. Trompeter had a valid claim
against the estate under California law. We begin our inquiry by
looking at the proceeding in the superior court, which culminated
in that court's entering a consent decree in favor of Ms.
Trompeter. Section 20.2053-1(b)(2), Estate Tax Regs., provides
that a consent decree before a local court will be accepted as a
basis for an estate tax deduction. Section 20.2053-1(b)(2),
Estate Tax Regs. further provides that:
The decision of a local court as to the amount and
allowability under local law of a claim or
administration expense will ordinarily be accepted if
the court passes upon the facts upon which
deductibility depends * * * However * * * It must
appear that the Court actually passed upon the merits
of the claim. This will be presumed in all cases of an
active and genuine contest. * * *
As noted by the Court of Appeals for the Ninth Circuit, "an order
of a state Court that adversely affects the tax right of the
United States and which is based upon a nonadversary proceeding,
does not foreclose the federal courts from [independently]
determining the tax liabilities". Wolfsen v. Smyth, 223 F.2d
111, 113-114 (9th Cir. 1955) (quoting Newman v. Commissioner,
222 F.2d 131, 136 (9th Cir. 1955), affg. 19 T.C. 708 (1953)); see
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