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consider what a willing buyer would pay for the underlying
marketable securities. Therefore, any reduction in value for
built-in tax liability or lack of marketability is unwarranted.
III. The Estate’s IRAs Should Not Be Entitled to Any Kind of
Discount
We find that all of the cases cited by the estate to be
distinguishable from this case, and that the differences in our
case justify a rejection of the estate’s proposed discount of the
IRAs. Further, we reject the estate’s characterization of the
tax liability that a beneficiary must pay upon distribution of
the IRAs as a “cost” to make the underlying assets marketable.
We agree with the Court of Appeals for the Fifth Circuit’s
reasoning in Estate of Smith v. United States, 391 F.3d 621 (5th
Cir. 2004), which concludes that the application of the willing
buyer-willing seller test does not allow the estate to reduce the
value of its retirement accounts by the income tax liability.
Further, we continue to follow the reasoning in our decision of
Estate of Robinson v. Commissioner, 69 T.C. at 224, which holds
that it is improper for this Court to ameliorate the potential
double taxation that will occur because Congress has already
provided such relief by enacting section 691(c).
A. Estate of Smith v. United States9
We think the better reasoning lies in Estate of Smith v.
9See Estate of Smith v. United States, 300 F. Supp. 2d 474
(S.D. Texas 2004), affd. 391 F.3d 621 (5th Cir. 2004).
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