Estate of George C. Blount, Deceased, Fred B. Aftergut, Executor - Page 75

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          against assets, including insurance proceeds, to ascertain net assets.      
               Concededly, a portion of the liability in Estate of                    
          Cartwright constituted an obligation to redeem stock being                  
          valued.  Nonetheless, in contrast to the instant case, the buy-             
          sell agreement in Estate of Cartwright had not been disregarded             
          pursuant to section 20.2031-2(h), Estate Tax Regs., or section              
          2703; indeed, our principal task in Estate of Cartwright was to             
          construe the terms of the buy-sell agreement, which was fully               
          respected.  Given the disregarded status of the buy-sell                    
          agreement at issue here, Estate of Cartwright has no                        
               Accordingly, we conclude that the $3,146,134 in insurance              
          proceeds due BCC upon decedent’s death should be treated as a               
          nonoperating asset of BCC and is not offset by BCC’s $4 million             
          obligation to redeem decedent’s shares.                                     
          E.   Accounting for Insurance Proceeds                                      
               Having established that the life insurance proceeds are a              
          nonoperating asset that is not offset by BCC’s $4 million                   
          obligation to redeem decedent’s shares, we turn next to the                 

               38 Moreover, the life insurance proceeds in Estate of                  
          Cartwright v. Commissioner, T.C. Memo. 1996-286, affd. in part              
          and remanded in part 183 F.3d 1034 (9th Cir. 1999), were                    
          contractually earmarked and required to be paid over to the                 
          decedent’s estate.  No such requirement existed in the instant              
          case; BCC was free to use the insurance proceeds in any manner,             
          though it in fact paid them over in partial satisfaction of its             
          obligation to redeem decedent’s shares.                                     

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