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operate to restrict the remedies available to a lender. Id. The
taxpayer argued that since the value of the residence exceeded
the amount of the debt, the estate would not be liable for the
encumbrances under the one action rule. Id. The Commissioner,
on the other hand, contended “that the estate is at least
potentially liable on the encumbrances, and therefore, the full
value of decedent’s interest in the residence is includable in
the gross estate”. Id. We held for the Commissioner. Id.
Given the foregoing, we are unable to agree with the estate
that decedent’s express legal liability on his own interest in
the disputed property may be disregarded in applying section
20.2053-7, Estate Tax Regs. Both the subject promissory note and
State law afforded the lender a choice of remedies, one of which
included the imposition of personal liability. Yet the estate
asks us to eliminate one of those alternatives on mere
generalities and assumptions regarding creditor preference. We
decline to do so. We hold that the full value of decedent’s
interest in the Monte Vista property must be included as part of
his gross estate, with a corresponding deduction allowed to the
extent permitted by the Internal Revenue Code.
III. Extent of Entitlement to Marital Deduction
Section 2056(a) authorizes a deduction from the gross estate
of “an amount equal to the value of any interest in property
which passes or has passed from the decedent to his surviving
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