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stipulated that the trust was, at the time of its establishment
on December 4, 1996, a “qualified domestic trust” under the
applicable provisions of section 2056A.
In addition, the parties have further stipulated that as of
October 22, 1996, all estate duty payable to the Hong Kong
Government, if any, and all debts, liabilities, funeral expenses,
and testamentary expenses with respect to decedent’s estate in
Hong Kong had been provided for or paid. Accordingly, as of
October 22, 1996, the residual beneficiaries were entitled under
Hong Kong law to their respective shares in the residuary estate
absolutely and could demand distribution thereof.
A Form 706-NA, United States Estate (and Generation-Skipping
Transfer) Tax Return, Estate of nonresident not a citizen of the
United States, was timely filed with respect to decedent’s estate
on December 5, 1996.2 The notice of deficiency on which this
litigation is based was subsequently issued on November 30,
1999.3 Therein, respondent determined that the estate was not
entitled to report decedent’s interest in the Monte Vista real
property at its net equity value for gross estate purposes and
that the marital deduction claimed by the estate should be
reduced.
2 App. A sets forth the calculations shown on the estate tax
return.
3 App. B describes respondent’s computations, to the extent
ascertainable from the notice of deficiency.
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