Estate of Marvin M. Schwan - Page 16




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          Agreement is to be taken into account in valuing the gross                  
          estate.  Accordingly, we must consider the nature of the interest           
          to be included in decedent’s gross estate.                                  
               As a general rule, the Internal Revenue Code imposes a                 
          Federal tax “on the transfer of the taxable estate of every                 
          decedent who is a citizen or resident of the United States.”                
          Sec. 2001(a).  Such taxable estate, in turn, is defined as the              
          “value of the gross estate”, less applicable deductions.  Sec.              
          2051.  Section 2031(a) then specifies that the “value of the                
          gross estate of the decedent shall be determined by including to            
          the extent provided for in this part [sections 2031 through                 
          2046], the value at the time of his death of all property, real             
          or personal, tangible or intangible, wherever situated.”  In this           
          connection, section 2033 broadly states that the “value of the              
          gross estate shall include the value of all property to the                 
          extent of the interest therein of the decedent at the time of his           
          death.”                                                                     
               Regulations further explain the valuation concept as                   
          follows:                                                                    
               The value of every item of property includible in a                    
               decedent’s gross estate under sections 2031 through                    
               2044 is its fair market value at the time of the                       
               decedent’s death * * * .  The fair market value is 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. * * * [Sec.                    
               20.2031-1(b), Estate Tax Regs.]                                        






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