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99-5903. On the issue of valuing these payments for estate tax
purposes, the District Court accepted with little explanation
that the prize was an annuity within the purview of section 7520.
See id. at 99-5905 to 99-5906. However, the court concluded that
departure from the actuarial tables was warranted because failure
“to take into account the absolute lack of liquidity of the
prize” rendered tabular valuation unreasonable. Id. at 99-5906.
We cannot agree with the District Court for several reasons.
First, as indicated above, case law offers no support for
considering marketability in valuing annuities. (The only other
case cited by the estate for this proposition, Bamberg, Executor
under the Will of McGrath v. Commissioner of Revenue, No. 132709,
1985 WL 15773 (Mass. App. Tax. Bd. Sept. 20, 1985), is a State
tax case that affords no cogent analysis of the issue for Federal
tax purposes.)
Second, the enactment of a statutory mandate in section 7520
reflects a strong policy in favor of standardized actuarial
valuation of these interests which would be largely vitiated by
the estate’s advocated approach. A necessity to probe in each
instance the nuances of a payee’s contractual rights, when those
rights neither alter or jeopardize the essential entitlement to a
stream of fixed payments, would unjustifiably weaken the law.
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