Estate of Hon Hing Fung, Deceased, Bernard Fung, Executor - Page 15




                                       - 15 -                                         
          controlling where, as here, we are dealing with mortgage                    
          indebtedness under section 2053(a)(4).  (Respondent cites only              
          section 2053(a)(4) in support of the Government’s position on               
          inclusion.)  Moreover, while we pointed out in Estate of Theis v.           
          Commissioner, 81 T.C. 741, 749-750 (1983), affd. 770 F.2d 981               
          (11th Cir. 1985), that section 2053(a)(4) was not intended to               
          apply where the decedent was only secondarily liable or an                  
          accommodation party, we went on to state that “Section 20.2053-7,           
          Estate Tax Regs., like section 2053(a)(4), was intended to cover            
          situations involving the liability for mortgages on a decedent’s            
          own property.”  Thus, Estate of Theis v. Commissioner, supra,               
          hardly stands for the principle that practicalities should                  
          override legal liability where a decedent is the named primary              
          obligor, on an explicitly recourse note, encumbering his or her             
          own fee interest in a parcel, particularly where the transaction            
          involved no third parties whom the decedent might have been                 
          accommodating.                                                              
               Furthermore, this Court has previously embraced the notion             
          that potential liability can be sufficient for purposes of                  
          section 20.2053-7, Estate Tax Regs., in a case somewhat analogous           
          to that now before the Court.  In Estate of Linderoth v.                    
          Commissioner, T.C. Memo. 1986-547, a residence was encumbered by            
          deeds of trust securing promissory notes.  The property was                 
          located in Nevada, where a statutory “one action rule” could                






Page:  Previous  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  Next

Last modified: May 25, 2011