Estate of Saunders v. CIR, No. 12-70323 (9th Cir. 2014)
Annotate this CasePetitioners challenged the Commissioner's disallowance of a $30 million deduction on the Estate's tax return for a lawsuit pending at the time of Gertrude Saunders' death (the Stonehill Claim). The court concluded that the Stonehill Claim was disputed at the date of the decedent's death, and its estimated value as of that date was not ascertainable with reasonable certainty. Therefore, the tax court properly disallowed the Estate's deduction, but correctly allowed a deduction in the amount paid to settle the Stonehill Claim after the decedent's death. Accordingly, the court affirmed the judgment of the district court.
Court Description: Tax. The panel affirmed the tax court’s decision disallowing an estate’s deduction based on a claim that was disputed at the date of the decedent’s death and for which the estimated value on that date was not ascertainable with reasonable certainty, but allowing a deduction of the subsequent settlement amount.
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