- 6 -
The parties have stipulated that if the FGP notes are to be
treated as QFOBIs, the adjusted values of the QFOBIs decedents
owned will constitute approximately 80 percent and 56 percent,
respectively, of the adjusted gross estates of decedents Duane B.
Farnam and Lois L. Farnam, the 50-percent liquidity test of
section 2057(b)(1)(C) therefore will be satisfied, and
petitioners will be entitled to the claimed $625,000 and $675,000
QFOBI deductions. If the FGP notes are not to be treated as
QFOBIs owned by decedents, the adjusted values of the QFOBIs will
constitute approximately 44 percent and 24 percent, respectively,
of decedents’ adjusted gross estates, the 50-percent liquidity
test of section 2057(b)(1)(C) therefore will not be satisfied,
and petitioners will not be entitled to the claimed $625,000 and
$675,000 QFOBI deductions.
Discussion
The issue before us presents a difficult question of
statutory interpretation. Petitioners and respondent each
scrutinize carefully the language of section 2057, the
legislative history, and the use of similar language elsewhere in
the Code.
The question of statutory interpretation at issue focuses
particularly on language from section 2057(e)(1)(B)-–namely, “an
interest in an entity” carrying on a trade or business.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: March 27, 2008