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has at no time contended that the provisions of section 7491 are
applicable, we conclude that the traditional burden remains upon
the estate.
II. Treatment of Monte Vista Property for Gross Estate Purposes
The parties in this case differ as to the treatment for
gross estate purposes of decedent’s interest in the Monte Vista
property. The estate contends that the parcel should be included
in the gross estate at its net equity value, after offsetting the
portion of the indebtedness considered to burden decedent’s one-
half interest in the property. Respondent, in contrast, takes
the position that decedent’s interest in the parcel must be
included in the gross estate at its full fair market value, with
the associated indebtedness being allowed as a deduction only to
the extent provided in sections 2106(a)(1) and 2053.
Section 2053(a)(4) specifies that deductions allowable in
computing the taxable estate include amounts “for unpaid
mortgages on, or any indebtedness in respect of, property where
the value of the decedent’s interest therein, undiminished by
such mortgage or indebtedness, is included in the value of the
gross estate”. Regulations promulgated under this section
further explain:
A deduction is allowed from a decedent’s gross
estate of the full unpaid amount of a mortgage upon, or
of any other indebtedness in respect of, any property
of the gross estate, including interest which had
accrued thereon to the date of death, provided the
value of the property, undiminished by the amount of
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