865 F.2d 178 (8th Cir. 1989), 88-5152, Foss v. United States

Docket Nº:88-5152.
Citation:865 F.2d 178
Party Name:Donna R. FOSS, Personal Representative of the Estate of Gustave J. Foss, deceased, Appellee, v. UNITED STATES of America, Appellant.
Case Date:January 09, 1989
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 178

865 F.2d 178 (8th Cir. 1989)

Donna R. FOSS, Personal Representative of the Estate of

Gustave J. Foss, deceased, Appellee,

v.

UNITED STATES of America, Appellant.

No. 88-5152.

United States Court of Appeals, Eighth Circuit

January 9, 1989

Submitted Nov. 16, 1988.

Rehearing and Rehearing En Banc Denied March 8, 1989

Page 179

Murray S. Horwitz, Washington, D.C., for appellant.

Richard M. Gaalswyk, St. Paul, Minn., for appellee.

Before HEANEY and BEAM, Circuit Judges, and STUART, [*] Senior District Judge.

STUART, Senior District Judge.

Donna R. Foss, personal representative of the Estate of Gustave J. Foss (the Estate), brought this action for a refund of federal estate taxes claiming that the Estate had made a valid election for a special use valuation of farm property under 26 U.S.C. Sec. 2032A which grants relief to the heirs of family farms who might otherwise find that valuation of inherited farm land at its "highest and best use" would produce such a large estate tax liability that it would be necessary to sell the farm to pay the tax. The matter was submitted to the district court on cross motions for summary judgment. The trial court found that a valid election had been made and denied the government's motion, granted the Estate's motion and ordered a refund of the entire amount of taxes paid, $153,329.32. The United States has appealed.

The issue before this court is whether the district court erred in holding that the estate qualified for the special use valuation of property under 26 U.S.C. Sec. 2032A even though a notice of election and a recapture agreement 1 signed by the heirs were not attached to the estate tax return, as required.

Gustave J. Foss died August 9, 1981. The United States Estate Tax Return was filed on time. It was signed by G. Donald Foss, the estate's personal representative at that time, who was also the principal beneficiary of the farmland involved. Question 11 on the tax return, which asked: "Do you elect the special valuation explained in instruction 137," was answered "Yes." Question 11 also contained the following instructions:

If "yes" attach a statement that includes the information described in instruction 23. Also complete the schedule below.

The "schedule below" asked for the names, social security numbers, relationships and addresses "of all parties receiving any...

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