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the amount of estate and death taxes payable from the *
* * [trusts] was highly conjectural. If Oliver lived
until May 1971, the value of the 1968 Family Trust
would no longer have been included in his estate as a
gift in contemplation of death under section 2035,
significantly reducing his estate tax liability.
Moreover, had he lived for several more years, the size
of his estate would have continued to diminish, leaving
the 1970 Family Trusts with an ever-decreasing estate
tax obligation. * * *
Id. at 394-395. The Court of Claims concluded: “Thus,
plaintiffs’ inability to reasonably estimate the amount of tax,
if any, to be paid from the * * * [trusts] made it proper to
compute the gift tax on the basis of the full value of the trust
assets. Robinette v. Helvering, 318 U.S. 184, 188-89 (1943).”
Id. at 395.49
B. Discussion
The specific question before us is whether to treat as part
of the sale proceeds (consideration) received by each petitioner
on the transfer of the gifted interest any amount on account of
the children’s obligation pursuant to the assignment agreement to
pay the 2035 tax that would be occasioned by the death of that
petitioner within 3 years of the valuation date. We have not
faced that specific question before.50 Neither Armstrong Trust
49 In Robinette v. Helvering, 318 U.S. 184, 188-189 (1943),
the Supreme Court held that, in computing the value of a gift of
a remainder interest in property, the value (as an offset) of the
donor’s contingent reversionary remainder interest was to be
disregarded because there was no recognized method of determining
its value.
50 Nevertheless, in Estate of Armstrong v. Commissioner,
(continued...)
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