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full fair market value for the securities without any discount.
We agree with the Fifth Circuit that “correctly applying the
willing buyer-willing seller test demonstrates that a
hypothetical buyer would not consider the income tax liability to
a beneficiary on the income in respect of a decedent since he is
not the beneficiary and thus would not be paying the income tax.”
Estate of Smith v. United States, 391 F.2d at 628.
The estate argues that Estate of Smith was decided under a
different theory; i.e., that the case did not consider the
marketability discount argument. The estate also contends that
the reasoning in Estate of Smith fails to understand the nature
of IRA accounts. We have already independently considered and
rejected the marketability discount theory. Further, the
estate’s argument that in general the tax consequences of
distributing the IRAs should be taken into account under the
willing buyer-willing seller test was the exact argument
considered by the court in Estate of Smith. Finally, the
estate’s assertion that Estate of Smith fails to understand the
nature of IRAs is contradicted by the estate’s misstatements of
the nature of IRAs.
B. Section 691(c)
The Fifth Circuit Court of Appeals, as are we, was convinced
of the relevance of our holding in Estate of Robinson v.
Commissioner, 69 T.C. at 224, in particular the reasoning
utilizing section 691(c). In Estate of Robinson, this Court
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