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In the instant case, the Court of Appeals reversed and
remanded with instructions regarding the proper evidence to
consider for valuing Exxon’s claim against the estate. The Court
of Appeals made no finding regarding the correct value of the
Exxon claim, nor did it preclude an ultimate finding of value
that would result in the same deficiency amount contained in our
prior decision. The Court of Appeals simply held that post-death
events, such as the settlement of the Exxon claim, should not be
considered in making the valuation determination. The Court of
Appeals remanded with instructions to make the valuation based on
facts that existed on the date of decedent’s death. The amount
of the prior deficiency determination was not disallowed in whole
or in part.
Although this Court has not previously addressed the issue,
other courts have held that section 7486 does not apply in the
present situation. In Tyne v. Commissioner, T.C. Memo. 1966-214,
the Tax Court allowed the taxpayer to deduct a portion of his
travel expenses. The taxpayer appealed but did not post a bond,
and the Commissioner assessed the deficiency. The Court of
Appeals for the Seventh Circuit reversed and remanded with
instructions to use a different method of allocation for purposes
of determining the allowable deduction. See Tyne v.
Commissioner, 385 F.2d 40, 42 (7th Cir. 1967). After the Tax
Court entered new decisions, the taxpayer again appealed, and the
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Last modified: May 25, 2011