- 29 -
produce a net deduction from the Estate. * * * [Id. at
528.]
The Court of Appeals also provided the following instructions:
Thus, on remand, when appraising the net value of
the deduction allowed the estate under section
2053(a)(3), account must be taken of the section 1341
income tax benefit that would have inured to the
benefit of the Estate if it had ultimately been held
liable (or settled) for a sum equal to the appraised
date-of-death gross value of Exxon’s claim. [Id. at
529; fn. reference omitted.]
On the basis of the Court of Appeals’s instructions, we reject
the estate’s contention that we are precluded from considering
the section 1341 income tax benefit in valuing Exxon’s claim.
Respondent calculated the amount of the section 1341 income
tax benefit using Mr. Glasser’s determination that Exxon’s claim
was worth $475,639.35. Respondent relied on the findings in our
prior opinion in Estate of Smith v. Commissioner, 110 T.C. 12
(1998), addressing the proper method for computing an income tax
credit and resulting overpayment under section 1341(a)(5) and
(b), and determined that the amount of the inchoate section 1341
income tax benefit affecting the value of the section 2053(a)(3)
deduction was $24,691.32. Respondent subtracted this amount from
Mr. Glasser’s valuation of Exxon’s claim, resulting in a net
value of $450,948.03. Although this amount is less than the
amount previously allowed in the notice of deficiency, respondent
does not seek to reduce the estate’s section 2053(a)(3) deduction
below the $681,840 amount allowed in the notice of deficiency.
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