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The wills admitted to probate pursuant to the April 1994
orders each created a trust in which the surviving spouse was
given a life estate. In addition, for purposes of effectuating
these trusts, the will of each decedent provided that if the
spouses died simultaneously, or under circumstances rendering it
difficult or impossible to determine order of death, the other
spouse would be conclusively presumed to have survived the
decedent. Based on the foregoing provisions, estate tax returns
were prepared which treated each spouse as having passed a life
interest to the other and which claimed a section 2013 credit for
tax on prior transfers with respect to the reciprocal interest so
received. In calculating the amount of the credit, the life
interests were valued utilizing the actuarial formulas and tables
set forth by the Internal Revenue Service in Notice 89-24, 1989-1
C.B. 660, and Notice 89-60, 1989-1 C.B. 700. Respondent’s
disallowance of these credits is the subject of the instant
controversy.
Discussion
Broadly stated, the principal issue in this case is whether
the estates are entitled to credits for tax on prior transfers
pursuant to section 2013. As more narrowly framed by the
contentions of the parties and the facts before us, resolution of
this inquiry turns on whether the estates are entitled to value
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