- 68 -
speculative to reduce the value of the gifts. Estate of
Armstrong v. United States, supra at 498. It was of no moment to
the Court of Appeals that the donor had in fact died within 3
years of the gift, thus causing a 2035 tax to be due, or that the
plaintiffs apparently had produced expert calculations of an
amount similar to the mortality-adjusted present value at issue
in this case. The Court of Appeals said:
The litigation attempts of the Estate and the Trust to
quantify through expert calculations the value of
potential estate taxes at the time of the transfers is
irrelevant. What is relevant is that the children’s
obligation to pay any estate taxes was then “highly
conjectural,” Murray, 687 F.2d at 394, and so provides
no ground for applying net gift principles. [Id.]
In Murray v. United States, supra, the donor had made gifts
in trust pursuant to an instrument that obligated the trustees to
pay, among other debts, the donor’s estate and death taxes
liabilities. The plaintiffs (executors of the donor’s estate)
argued that the obligation to pay the donor’s estate and death
taxes rendered the gifts without value when made. The Court of
Claims disagreed, finding that the obligation to pay estate and
death taxes “was not * * * susceptible to valuation at the date
of the gifts because the economic burden of paying these taxes
was then unknown.” Id., 687 F.2d at 394. The Court questioned
whether it was even possible to approximate the value of the
trustee’s obligation to pay the donor’s estate and death tax
liabilities:
Page: Previous 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 NextLast modified: May 25, 2011