Estate of Austin Korby - Page 25

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          Section 2039(b), however, provides that section 2039(a) applies             
          only to the part of the value of the annuity “proportionate to              
          that part of the purchase price therefor contributed by the                 
          decedent.”  The estate has shown that the annuity was purchased             
          in 1995 using $140,000 of KPLP’s funds.  Because the purchase               
          price of the annuity was contributed entirely by KPLP and none              
          was paid by Austin, the value of the annuity is not includable in           
          Austin’s gross estate under section 2039.                                   
               However, the fact that an amount is not includable in a                
          decedent’s gross estate under section 2039 does not preclude its            
          inclusion in the gross estate under some other section of the               
          estate tax laws.  See Estate of Kleemeier v. Commissioner, 58               
          T.C. 241, 252 (1972) (citing section 20.2039-1(a), Estate Tax               
          Regs.).  The 1995 annuity was purchased by KPLP and was included            
          as one of its assets when Austin died.  Its value is therefore              
          includable in Austin’s gross estate under section 2036 to the               
          same extent the values of the other KPLP assets are includable.             
          In calculating KPLP’s total value, the value of the 1995 annuity,           
          agreed upon by the parties as $146,713.59 at Austin’s death,                
          should be included.  The portions includable in Austin’s gross              
          estate (the 58.46-percent interest he contributed and the 2-                
          percent general partnership interest owned by the living trust)             
          shall then be calculated from the total value.                              

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Last modified: May 25, 2011