Estate of Mary B. Bull - Page 19




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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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