Estate of Doris F. Kahn, Deceased, LaSalle Bank, N.A., Trustee and Executor - Page 15

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          States, 391 F.3d at 628.6  Because the tax burden associated with           
          distributing the assets in the IRAs will never be transferred to            
          a hypothetical buyer, we find that the reasoning of Estate of               
          Davis v. Commissioner, supra, inapplicable to this case.                    
               B.   Cases Where Future Tax Benefit Taken Into Account                 
                    1.   Estate of Algerine Smith–Value of Section 1341               
                         Deduction Taken Into Account in Valuing Claim                
                         Against Estate                                               
               In Estate of Algerine Smith v. Commissioner,7 198 F.3d 515             
          (5th Cir. 1999), revg. 108 T.C. 412 (1997), the Court of Appeals            
          for the Fifth Circuit addressed whether to consider the impact of           
          an income tax benefit in valuing a claim against an estate for              
          the purpose of the estate tax deduction under section 2053.  The            
          estate owned a royalty interest in Exxon.  The U.S. Government              
          had obtained a multibillion dollar judgment against Exxon, and              
          the company asserted that it had the right to recoup some of the            
          royalty payments it made to the estate and others to pay that               
          judgment.  Exxon sued the royalty owners, and the District Court            
          ruled on a motion for summary judgment determining that the                 
          royalty owners were liable to Exxon.  The court then referred the           


               6Estate of Smith v. United States, 300 F. Supp. 2d 474 (S.D.           
          Tex. 2004), affd. 391 F.3d 621 (5th Cir. 2004), is discussed at             
          length infra sec. III.                                                      
               7For the sake of avoiding confusion, we are providing a                
          method to differentiate this Estate of Smith from the Estate of             
          Smith cited in this section and further discussed infra sec. III.           






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