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Commissioner, 135 F.3d 1017 (5th Cir. 1998), revg. and remanding
T.C. Memo. 1996-307, and section 20.7520-4, Estate Tax Regs., to
be misplaced.
The decedent in Estate of McLendon v. Commissioner, supra at
1018-1020, after having been diagnosed with cancer, made a
transfer of property in trust and received in return an annuity
based on the actuarial tables for an individual of his age. He
died approximately 6 months later, and the Commissioner
determined that the transferred property was to be included in
his estate under section 2036(a) as a transfer not for adequate
and full consideration. See id. at 1020-1021. The Court of
Appeals for the Fifth Circuit held that the decedent was entitled
to follow Rev. Rul. 80-80, 1980-1 C.B. 194, and concluded, as a
factual matter, that his death was not clearly imminent at the
time of the transfer. See id. at 1023, 1025. Use of actuarial
tables was accordingly deemed proper. See id.
The estates quote the following language from Estate of
McLendon v. Commissioner, supra at 1025, to support their
reliance on the transitional rules of section 20.7520-4(a),
Estate Tax Regs.: “Where the Commissioner has specifically
approved a valuation methodology, like the actuarial tables, in
his own revenue ruling, he will not be heard to fault a taxpayer
for taking advantage of the tax minimization opportunities
inherent therein.”
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