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were to be reimbursement for costs of construction that had been
completed. Respondent’s determination was that the estate should
not be allowed to claim more than $800,000 in future obligations
to the contractor for an asset (the residence) that is valued at
$612,000 for estate tax purposes. Respondent’s logic is equally
applicable to the inclusion of possible insurance reimbursement
where it has no meaningful relationship to the fair market value
of an includable asset. Ultimately, the transfer tax should
reach the net value of decedent’s assets, and the cost and
reimbursement amounts in the setting of this case do not provide
a basis to calculate that value.
Conceptually, the purpose of the estate tax is to tax the
transmission of wealth at death. See United States v. Stapf, 375
U.S. 118, 134 (1963). Section 2031 is intended to provide for
inclusion of a decedent’s interests transferred at death.
Likewise, section 2053(a) was intended to ensure that only the
net estate; i.e., that which is available for distribution to the
beneficiaries, is taxed. See Hibernia Bank v. United States, 581
F.2d 741, 746 (9th Cir. 1978).
In this case, the asset available for distribution to the
beneficiaries was the 57-percent completed residence. The
beneficiaries had the option to complete the residence and
thereby incur benefits and burdens of such action. The fair
market value of the asset received by the beneficiaries, however,
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