Estate of Johnston Ex Rel. Payne v. United States

MEMORANDUM ORDER

FISH, District Judge.

Question Presented

These cross-motions for summary judgment present the following question of first impression concerning the federal estate tax: When a decedent’s estate is valued on the alternate valuation date (i.e., six months after the date of death), should that value include proceeds from the sale of oil and gas produced since the date of death? In other words, do such proceeds represent a change in form of assets of the gross estate, or do they constitute income?

Undisputed Facts

The facts are not in dispute. At the time of Nellie S. Johnston’s death…