§2031 — Definition of gross estate

On June 12, 2023, respondent filed an Amendment to Answer, in which he asserted that the proceeds of the Zurich Policies are includible in the gross estate pursuant to section 2031 and, in the alternative, section 2042(2).

MEMORANDUM FINDINGS OF FACT AND OPINION FOLEY, Judge: After concessions the issues for decision are the values, pursuant to section 2031, ofthree pieces offine artwork.¹ ¹Unless otherwise indicated, all section references are to the Intemal (continued...) SERVED Dec 22 2015 - 2 - [*2] FINDINGS OF FACT Bernice Newberger, a resident ofPalm Beach County, Florida, died in Chicago, Illinois, on July 28, 2009 (date ofdeath), and her will

Discounts Applicable to Decedent's Membership Units in WCB Holdings The relevant part of section 2031 provides that any property included in a decedent's gross estate is included at its fair market value.

section 2031 (1994)) provided for the establishment of JROTC units at public and private schools. Retired commissioned or noncommissioned officers may serve as instructors and administrators in JROTC units pursuant to 10 U.S.C. section 2031(d) which states: (d) Instead of, or in addition to, detailing officers and noncommissioned officers on active

Case law and regulatory authority have interpreted the general estate tax valuation provisions of section 2031 to include special rules that allow qualifying buy-sell agreements to control estate tax fair market value.

Case law and regulatory authority have interpreted the general estate tax valuation provisions of section 2031 to include special rules that allow qualifying buy-sell agreements to control estate tax fair market value.

2031, I.R.C., and sec. 2040, I.R.C., provide an explicit approach to valuing joint tenancy. Fractional interest discounts and lack of marketability discounts are inapplicable to the valuation of joint tenancy under sec. 2040(a), I.R.C. Held, further: P is liable for the addition to tax for late filing under sec. 6651(a), I.R.C. Lance M. Weagant and Randall D. Fowler, for petitioner. Dwight M. Montgomery, for respondent. WRIGHT, Judge: Respondent determined a deficiency of $154,545 in petitioner'

Section 2031 directs attention to other sections to determine what property, and to what extent, is included in the gross estate. Section 2033 provides that there shall be included in the value of the gross estate the value of all property to the extent of the decedent’s interest therein at the time of his death. Because at death the decedent does

Section 2031 is intended to provide for inclusion of a decedent’s interests transferred at death. Likewise, section 2053(a) was intended to ensure that only the net estate; i.e., that which is available for distribution to the beneficiaries, is taxed. See Hibernia Bank v. United States, 581 F.2d 741, 746 (9th Cir. 1978). In this case, the asset ava

Discounts Applicable to Decedent’s Membership Units in WCB Holdings The relevant part of section 2031 provides that any property included in a decedent’s gross estate is included at its fair market value.

With regard particularly to unlisted, closely held stock in corporations such as TPC (with regard to which no bid and asked prices or other arm's-length sales information is available), the statutory language of section 2031rprovides that the value of stock in comparable public corporations shall be taken into account.

Its purpose is "to instill in students in United States secondary educational institutions the values of citizenship, service to the United States, and personal responsibility and a sense of accomplishment." 10 U.S.C. sec. 2031(a)(2). Retired officers may serve as instructors and administrators, consistent • with the following pro

1986. 2. Held, further, P is liable for an addition to tax for failure to timely file the estate tax return. Sec. 6651(a)(1), I.R.C. 1986; United States v. Boyle, 469 U.S. 241 (1985). 3. Held, further, P is not liable for an addition to tax for failure to timely pay the estate tax liability shown on P’s estate tax return. Sec. 665

Section 2031 provides that the gross estate generally comprises all of the decedent's property, real or personal, tangible or intangible, wherever situated. Section 2033 states in very broad terms: "The value of the gross estate shall include the value of all property to the extent of the interest therein of the decedent at the time of his death."

§§ 2031, 2033–2046; Treas. Reg. § 20.2031-1. If a decedent made an inter vivos transfer of property (other than a bona fide sale for adequate and full consideration) and retained specific rights or interests in the property that were not relinquished until death, the full value of the transferred property generally is included in the gross estate. I

21 [*21] Section 2031 and regulations thereunder provide general rules for property valuation for estate tax purposes, though the same valuation rules apply to income tax cases such as this.

Treasury Regulation § 20.2053-8(b). These arguments are misdirected. The limitations on deductibility set forth in these regulations do not apply with respect to claims in favor of the estate that are includible in the decedent’s gross estate under section 2031. See Estate of Saunders, 136 T.C. at 418. The obligation of the SK Trust to make the agreed-upon settlement payment to the estate does not give rise to any deduction by the estate. Rather, the estate’s claim against the SK Trust is itsel

Bolles under IRC section 2031 is $1,063,333 instead ofzero as reported and that interest on the PromissoryNote and receivable is includible in the gross estate under IRC section 2033 in the amount of$1,165,778.

Section 2031 Section 2031 generally provides that the value ofthe decedent's gross estate includes the fair market value ofall property, wherever situated, at the time ofher death. See sec. 20.2031-1(b), Estate Tax Regs. The value ofstocks is the fair market value per share on the applicable valuation date. Id. sec. 20.2031-2(a). Fair market value

the transfer ofthe taxable estate of every decedent who is a citizen or resident ofthe United States"), and sec. 2051 (defining the value ofa taxable estate as the value ofthe gross estate less certain deductions provided for in the estate tax), and sec. 2031 (defining the value ofa gross estate as the value at the time ofdecedent's death "ofall property, real or personal, tangible or intangible, wherever situated"), with, e.g., sec. 877A (imposing an exit tax on U.S. citizens and long-term resi

2031.2 For purposes ofthe estate tax, property value is determined by finding the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell, and both having reasonable knowledge of relevant facts. Sec. 20.2031-1(b), Estate Tax Regs. The willing buyer and th

Generally, the value ofthe gross estate is the fair market value ofthe included property as ofthe date ofdeath. Sec. 20.2031-1(b), Estate Tax Regs. Fair market value is the price at which propertywould change hands between a willing buyer and a willing seller, neither under any compulsion to buy or sell and both having knowledge ofreleva

SERVED MAR 112013 - 2 - Donald Frederick Wood, J. Graham Kenney, Harry M. Reasoner, Stacey N. Vu, and Juliana D. Hunter, for petitioners. Warren P. Simonsen, Sharyn M. Ortega, and Susan S. Hu, for respondent. HALPERN, Judge: By notice ofdeficiency issued to petitioners (notice), respondent determined an estate tax deficiency of$9

estate. Lawsuits as Assets or as Contingent Liabilities The limitations on deduction of liabilities set- forth in the regulations quoted above do not apply to the inclusion in a - 20 - decedent's gross estate of claims in favor of the estate under section 2031. Thus there are many cases in which the value of claims in favor of an estate is established, including those the estate cited in the filed briefs. See United States v. Simmons, 346 F.2d 213 (5th Cir. 1965); Bank of Cal., Natl. Associatio

James R. Spoor and Jon M. Wilson for petitioner. Stephen R. Takeuchi, for respondent. SERVED Jun 28 2011 - 2 - MEMORANDUM FINDINGS OF FACT AND OPINION HALPERN, Judge: By notice of deficiency (the notice), respondent determined a deficiency of $6,990,720 in Federal estate tax due from the estate of Louise Paxton Gallagher (deceden

the gross estate is "determined by including to the extent provided for in * * * [sections 2031 through 2046] , the value at the -time - of * * * [the decedent's] death of all property, real or personal, tangible or intangible, wherever situated.'' Sec. 2031(a . T -5- Section 2033 includes' "the value of all property to the, extentsof -the interest therein of the decedent at the time-of his death" ~in the value of the gross estate. Thus section 2033 includes the valuesof the decedent's interest

Saunders estate. Lawsuits as Assets or as Contingent Liabilities The limitations on deduction of liabilities set forth in the regulations quoted above do not apply to the inclusion in a decedent’s gross estate of claims in favor of the estate under section 2031. Thus there are many cases in which the value of claims in favor of an estate is established, including those the estate cited in the filed briefs. See United States v. Simmons, 346 F.2d 213 (5th Cir. 1965); Bank of Cal., Natl. Associati

In Gross", petitioner granted the V lleY Land Conservancy the development rights, "as defined Dy section 2031(5)(D) [sic] * * * except as specifically reserved herein",8 over the -Bull Mountain and Sylvester parcels .

Section 2103'specifies that the gross estate of a nonresident alien "shall be that part of his gross estate (determined as provided in section 2031) which at the time of his death is - 9 - situated in the United States ." Thus, the gross estate of a nonresident alien comprises "all property, real or personal, tangible .or intangible", to(cid:127)the extent provided in sections 2033 through 2045, so long as that property is located in the United States .

Section 2103 specifies that the gross estate of a nonresident alien “shall be that part of his gross estate (determined as provided in section 2031) which at the time of his death is situated in the United States.” Thus, the gross estate of a nonresident alien comprises “all property, real or personal, tangible or intangible”, to the extent provided in sections 2033 through 2045, so long as that property is located in the United States.

section 2031 ( d)(2) . They argue that the provision is in contravention of other Federal rules . Petitioners produced a memorandum dated September 9, 1993, from the Department of the Army serving notice that retired military are allowed to use "government housing" . They contend that this proves petitioner is on "active duty" and entitled to allow

s presented are:3 2In the estate tax notice of deficiency, respondent determined that the value of a $250,000 St. Francis Hospital, Inc. bond was includable in Sylvia Gore’s (decedent’s) gross estate under sec. 2038, or, alternatively, under either sec. 2031 or 2033. In the stipulation of facts, petitioner concedes that the bond is includable in decedent’s gross estate. In the estate tax notice of deficiency, respondent disallowed a deduction of $19,084 for a note payable from decedent. In the s

s presented are:3 2In the estate tax notice of deficiency, respondent determined that the value of a $250,000 St. Francis Hospital, Inc. bond was includable in Sylvia Gore’s (decedent’s) gross estate under sec. 2038, or, alternatively, under either sec. 2031 or 2033. In the stipulation of facts, petitioner concedes that the bond is includable in decedent’s gross estate. In the estate tax notice of deficiency, respondent disallowed a deduction of $19,084 for a note payable from decedent. In the s

In most instances, the value of the gross estate is the fair market value of the included property as of either the date of death, or the alternate valuation date under section 2032 if elected by the executor as is the case here. Sec. 20.2031- 1(b), Estate Tax Regs. An exception to the general valuation rule exists when the property in q

In most instances, the value of the gross estate is the fair market value of the included property as of either the date of death, or the alternate valuation date under section 2032 if the personal representative elects, as Natalie did here. Sec. 20.2031-1(b), Estate Tax Regs. Fair market value is the price at which property would change

For purposes of this computation, the 17 Petitioners argue that decedent gave away a 48.5502- percent limited partnership interest in the LRFLP more than 3 years before her death. Petitioners explain that decedent died on July 14, 2000, and that the 48.5502-percent interest corresponds to the total of the limited partnership interests th

In most instances, the value of the gross estate is the fair market value of the included property as of either the date of death, or the alternate valuation date under section 2032 if the personal representative elects, as Natalie did here. Sec. 20.2031-1(b), Estate Tax Regs. Fair market value is the price at which property would change

For purposes of this computation, the parties dispute whether section 2036(a) applies to the residence. In relevant part, section 2036(a) provides: SEC. 2036. TRANSFERS WITH RETAINED LIFE ESTATE. (a) General Rule. The value of the gross estate shall include the value of all property to the extent of any interest therein of which the dece

In most instances, the value of the gross estate is the fair market value of the included property as of either the date of death, or the alternate valuation date under section 2032 if the personal representative elects, as Natalie did here. Sec. 20.2031-1(b), Estate Tax Regs. Fair market value is the price at which property would change

For purposes of the estate tax, property value is determined by finding the price at which the property would (cid:16)04ch2ange hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell, and both having reasonable knowledge of relevant facts. Sec. 20.2031- 1(b), Estate Tax Regs. The willing

2031 merely sets out a formula to calculate the salary of retired members serving as JROTC instructors. It further found that military "allowances" are payable only to members entitled to "basic pay", that only active duty members are entitled to basic pay, and that the taxpayer, retired from the military, was not on active duty while serving

Richard J. Sideman, Steven M. Katz, and George I. Hoffman, for petitioner. Marion T. Robus, for respondent. - 2 - MEMORANDUM FINDINGS OF FACT AND OPINION HALPERN, Judge: By notice of deficiency dated April 16, 1999, respondent determined a deficiency in Federal estate tax of $5,427,983. Of the adjustments giving rise to that dete

Section 2103 then specifies that the gross estate of a nonresident alien “shall be that part of his gross estate (determined as provided in section 2031) which at the time of his death is situated in the United States.” Hence, the gross estate of a nonresident alien comprises “all property, real or personal, tangible or intangible”, to the extent provided in sections 2033 through 2045, so long as that property is located in the United States.

- 6 - The regulations promulgated under section 2031 generally provide the methods by which property described in sections 2033 through 2045 is to be valued.

position that the oral options were granted prior to decedent's death and supersede the existing leases. Thus there is no evidence that any discount is attributable to the existing leases. The unencumbered fair market values of the ranch properties at decedent's date of death - 16 - are the amounts to be included in decedent's gross estate under section 2031. To reflect the foregoing and concessions of the parties, Decision will be entered under Rule 155.

20.2031-1(a), Estate Tax Regs. Under section 2033, all property beneficially owned by the decedent at the time of death will be included in the gross estate. See sec. 20.2033-1(a), Estate Tax Regs. Section 2044 includes in the gross estate the value of all qualified terminable interest property (QTIP); i.e., property in which the de

The parties have agreed to a stipulation of settled issues which disposes of most of the (continued...) - 2 - Whether guaranteed distributions under a marital settlement agreement survived decedent’s death and are includable in her gross estate under section 2031;2 and (2) the fair market value of certain property interests held by decedent at the time of her death.

Section 2103 then specifies that the gross estate of a nonresident alien “shall be that part of his gross estate (determined as provided in section 2031) which at the time of his death is situated in the United States.” Hence, the gross estate of a nonresident alien comprises “all property, real or personal, tangible or intangible”, to the extent provided in sections 2033 through 2045, so long as that property is located in the United States.

Section 1.664-2(c), Income Tax Regs., provides that the present value of an annuity is to be computed in accordance with regulations promulgated under section 2031.

s used for valuation purposes, none of the documentation requirements of sec. 2032A(e)(7)(A) would be required.”21 Valuation disputes under section 2032A(e)(8) will be settled or litigated in a manner similar to that used in valuation disputes under section 2031. See Estate of Hughan v. Commissioner, supra; sec. 20.2031- 1(b), Estate Tax Regs. (“All relevant facts and elements of value as of the applicable valuation date shall be considered in every case.”). In contrast to Estate of Hughan, and

or a term of years to an individual or the individual’s estate is valued as a fixed-term interest. Section 1.664-2(c), Income Tax Regs., provides that the present value of an annuity is to be computed in accordance with regulations promulgated under section 2031. Such regulations, in turn, contain the following example: Example 4. Annuity payable for a term of years. The decedent, or the decedent’s estate, was entitled to receive an annuity of $10,000 a year payable in equal quarterly installmen

OPINION Issue 1 Section 2031 generally provides that the value of a decedent's gross estate includes the value of property described in sections 2033 through 2044.

Issue 1 Section 2031 includes in the decedent's gross estate the value of property described in sections 2033 through 2044. Under section 2038, a decedent's gross estate includes the value of all property interests transferred by a decedent during the decedent's lifetime, unless for full consideration, if at the decedent's death the enjoyment of such prope

30 See supra note 28. - 50 - 20.2031-1(b), Estate Tax Regs.; see also First Natl. Bank v. United States, 763 F.2d 891, 893-894 (7th Cir. 1985); Estate of Newhouse v. Commissioner, 94 T.C. at 218; Estate of Gilford v. Commissioner, 88 T.C. at 52. In this case, petitioner asks us to look at the price negotiated in a settlement consum

OPINION Issue 1 Section 2031 generally provides that the value of a decedent’s gross estate includes the value of property described in sections 2033 through 2044.

Fair market value is defined as "the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts." United States v. Cartwright, 411 U.S. 546, 551 (1973); Estate of Newhouse v. Commissioner, supra at

Petitioner also urges that assuming, for the sake of argument, valuation under section 2031 is at issue, the proper measure of value for the interest transferred is limited to that which decedent could have realized during his lifetime because the securities law restrictions were not self-imposed, and the facts do not present an abuse situation.

Petitioner also urges that assuming, for the sake of argument, valuation under section 2031 is at issue, the proper measure of value for the interest transferred is limited to that which decedent could have realized during his lifetime because the securities law restrictions were not self-imposed, and the facts do not present an abuse situation.

ally the fair market value of the property as of the date of the decedent's death. Sec. 1014(a). This basis rule parallels the general rule of the estate tax for determining the value of property which is included in a decedent's gross estate under section 2031. Sec. 1.1014-1(a), Income Tax Regs. The parties agree that Elwood realized $619,425 on the sale of the Grapevine property, but disagree on Elwood's basis. Respondent argues that Elwood was bound by a duty of consistency to use a basis of

ally the fair market value of the property as of the date of the decedent’s death. Sec. 1014(a). This basis rule parallels the general rule of the estate tax for determining the value of property which is included in a decedent’s gross estate under section 2031. Sec. 1.1014-1(a), Income Tax Regs. The parties agree that Elwood realized $619,425 on the sale of the Grapevine property, but disagree on Elwood’s basis. Respondent argues that Elwood was bound by a duty of consistency to use a basis of

The asserted valuation of the employment agreement was computed pursuant to Regulations promulgated under Section 2031 of the Code.