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sound valuation will be based upon all the relevant
facts, but the elements of common sense, informed
judgment and reasonableness must enter into the process
of weighing those facts and determining their aggregate
significance. [Id. at 526.]
The Court of Appeals then emphasized that “every lawsuit is
unique; thus it is incumbent on each party to supply the Tax
Court with relevant evidence of predeath facts and occurrences
supporting the value of the Exxon claim advocated by that party.”
Id. at 526.
The Court of Appeals also disagreed with our holding that
the section 1341(a) income tax benefit that would arise from any
payment of Exxon’s claim was an asset includable in the gross
estate. The Court of Appeals concluded that the value, for
estate tax purposes, of the contingent section 1341 deduction was
not a free-standing asset of the estate but was one of the
factors to be considered in appraising the date-of-death value
eventually assigned to Exxon’s claim for purposes of the section
2053(a)(3) deduction. Id. at 528. The Court of Appeals noted:
Of course, once the Tax Court determines, on remand,
the gross value of the Exxon claim for purposes of
section 2053(a)(3), calculation of the section 1341
income tax benefit becomes a simple mathematical
calculation, the result of which will diminish the
gross value of the Exxon claim, dollar for dollar, to
produce a net deduction from the Estate. * * * [Id.]
The Court of Appeals ultimately remanded the case for further
proceedings consistent with the instructions provided in its
opinion. Id. at 532.
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