Estate of George C. Blount, Deceased, Fred B. Aftergut, Executor - Page 68

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          assets, including proceeds of life insurance policies payable to            
          or for the benefit of the company, to the extent such                       
          nonoperating assets have not been taken into account in the                 
          determination of net worth, prospective earning power and                   
          dividend-earning capacity”).  Whether BCC’s $4 million obligation           
          to redeem decedent’s shares offsets the life insurance proceeds,            
          as the estate argues, is another question.  In Estate of                    
          Huntsman, we reasoned that, because life insurance proceeds                 
          should be treated like any other nonoperating asset, to the                 
          extent such assets were considered in valuing a company, they               
          were subject to offset by corporate liabilities.  However, we               
          were not presented in that case with the question of whether a              
          corporation’s obligation to redeem the very shares that are to be           
          valued should be treated as a liability, offsetting corporate               
          assets.34  The estate here urges that we treat BCC’s enforceable            
          $4 million obligation to redeem the shares whose value is at                
          issue as a liability offsetting BCC’s assets (i.e., the                     
          $3,146,134 life insurance proceeds plus almost $1 million in                
          other assets) in arriving at the value of the same shares.                  

               34 The only redemption involved in Estate of Huntsman v.               
          Commissioner, 66 T.C. 861 (1976), was of a sufficient number of             
          the decedent shareholder’s shares to pay estate taxes.  The                 
          shares whose value was at issue in Estate of Huntsman were not              
          the subject of a redemption obligation of the corporation.                  

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