- 19 - 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,Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
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