Estate of Algerine Allen Smith - Page 2




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          Commissioner, 198 F.3d 515 (5th Cir. 1999), reversing our                   
          decision in 108 T.C. 412 (1997), regarding the deductible amount            
          of a claim against the estate for purposes of section                       
          2053(a)(3),1 vacating our judgment, and remanding for a                     
          determination of the value of the claim against the estate as of            
          decedent’s date of death.                                                   
                                  FINDINGS OF FACT                                    
               We stated the detailed and intricate facts of this case in             
          our original opinion.  Estate of Smith v. Commissioner, 108 T.C.            
          412 (1997).  We summarize the relevant facts from that opinion              
          and set forth additional findings of fact for purposes of                   
          deciding the issue on remand.                                               
          General Facts                                                               
               On April 23, 1970, Algerine Allen Smith (decedent), as                 
          lessor, entered into an oil, gas and mineral lease with Humble              
          Oil & Refining Co. (Humble).  Pursuant to this lease agreement,             
          decedent retained a royalty interest in oil and gas production              
          obtained from an 80-acre tract of land in Wood County, Texas.  On           
          April 23, 1970, Jessamine and Frankie Allen, decedent’s aunts,              
          also entered into oil and gas leases with Humble, pursuant to               
          which they retained royalty interests from the oil and gas                  



               1Unless otherwise indicated, all section references are to             
          the Internal Revenue Code in effect as of the date of decedent’s            
          death, and all Rule references are to the Tax Court Rules of                
          Practice and Procedure.                                                     




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