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the fair market value of decedent’s interest in an asset on the
date of death. Here decedent owned an incomplete residence (57-
percent completed). The parties’ disputes, however, focus on the
intangible aspects connected with the possible completion of the
residence.
Respondent does not argue that cost should be the measure of
the value of the partially or fully completed asset. On this
point also see Securities Mortg. Co. v. Commissioner, 58 T.C.
667, 675 (1972), where cost was not used to value incomplete
realty. Respondent’s determination is that decedent had a right
or was entitled to the completion of the residence so that the
completed value should have been included in the gross estate.
Accordingly, respondent’s position is that decedent had a right
to the insurance reimbursement, and the value of that right was
includable as an asset in her estate.
Under the agreement between Chubb and decedent, Chubb had
unilaterally agreed to pay for restoration of the residence, but
only if restoration was pursued and completed. To the extent
that Chubb had an obligation to decedent at the time of her
death, it could only be to reimburse for any portion of the
residence that had been restored. In addition, Chubb’s exposure
under the agreement was to be reduced if the cost of construction
was less than estimated.
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