- 12 -
value of the gross estate includes the value of all property to
the extent of the decedent’s interest therein on the date of
death. See sec. 2033. The executor, however, may elect to value
a decedent’s property as of an alternate valuation date; i.e., 6
months after death. See sec. 2032. The election to value
decedent’s property as of the alternate valuation date was made
in the instant case. The term value means fair market value,
which is defined for Federal estate tax purposes as “the price at
which the property would change hands between a willing buyer and
a willing seller, neither being under any compulsion to buy or to
sell and both having reasonable knowledge of relevant facts.”
United States v. Cartwright, 411 U.S. 546, 551 (1973); sec.
20.2031-1(b), Estate Tax Regs. The parties dispute: (1) Whether
the guaranty obligation of Mr. Hoffman is includable in
decedent’s gross estate, and (2) the value of certain property
interests includable in decedent’s gross estate.
A. Guaranty Provision in Marital Settlement Agreement
The estate argues that the guaranty obligation of Mr.
Hoffman is not includable in the gross estate because it
terminated on the death of decedent. The estate contends that
the marital settlement is ambiguous, and, when read in
conjunction with the testimony of its witnesses, the marital
settlement contemplates that the guaranty was to terminate on
decedent’s death. Respondent argues that the marital settlement
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011