Estate of Wayne-Chi Young, Deceased, Tsai-Hsiu Hsu Yang, Executrix - Page 1

                                   110 T.C. No. 24                                    

                               UNITED STATES TAX COURT                                

                        ESTATE OF WAYNE-CHI YOUNG, DECEASED,                          
                    TSAI-HSIU HSU YANG, EXECUTRIX, Petitioner v.                      
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 20139-94.                     Filed May 11, 1998.           

                    Decedent and his wife Yang owned real property in                 
               California, a community property State.  Decedent's Federal            
               Estate Tax Return reported 50 percent of the date of death             
               value of the property as decedent's interest therein under             
               sec. 2033, I.R.C., and then claimed a 15-percent fractional            
               interest discount under Propstra v. United States, 680 F.2d            
               1248 (9th Cir. 1982).  After filing the estate tax return, P           
               obtained a State trial court decree which adjudicated                  
               decedent's interest in certain property.  R was not a party            
               to the State court proceeding.  R determined that decedent             
               and Yang held the property as joint tenants with right of              
               survivorship, as stated in the deeds.  Therefore, R                    
               determined that decedent's gross estate included half the              
               value of the property under sec. 2040, I.R.C., and                     
               disallowed the 15-percent fractional interest discount.                
                    Held:  The State trial court's decree does not bind               
               this Court for Federal estate tax purposes.  Further, P has            
               failed to overcome the presumption of joint tenancy with               

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