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exceeded book value on his date of death. See id. at 895. The
sons paid the deficiency, brought a District Court refund suit,
and prevailed on a motion for summary judgment. See id. The
Commissioner appealed to the Court of Appeals for the Tenth
Circuit, which affirmed the judgment in favor of the executor-
sons. See id. at 897.
Applying the Wilson-Lomb test, the Court of Appeals for the
Tenth Circuit held that the estate tax value was properly limited
to book value because the sale to the sons at book value was
required under a reciprocal and enforceable agreement. See id.
at 896. The Court of Appeals held the probate court’s prior
judgment to be a binding determination that: (1) The executors
were obligated to sell to the surviving partners at book value
and (2) the calculation of book value was correct. See id.
The Court noted that if the Commissioner had pleaded
affirmatively that the partnership agreement was executed in “bad
faith,” or that the probate court proceeding was collusive or
nonadversarial, there might have been a genuine issue of material
fact. See id. at 897. However, as stated by the Court: “With
no such issues of fact joined, the question whether the estate
tax should be computed on the basis of the book value or the
market value was one of law.” Id.
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