                                                                              FILED
                            NOT FOR PUBLICATION                                 MAR 26 2014

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS



                            FOR THE NINTH CIRCUIT


ESTATE OF ELLEN D. FOSTER,                       No. 11-73400
deceased, Ashley Bradley and Tara
Shapiro, Co-Executors,                           Tax Ct. No. 16839-08

              Petitioner - Appellant,
                                                 MEMORANDUM*
  v.

COMMISSIONER OF INTERNAL
REVENUE,

              Respondent - Appellee.


                           Appeal from a Decision of the
                             United States Tax Court

                     Argued and Submitted February 13, 2014
                            San Francisco, California

Before: CALLAHAN and M. SMITH, Circuit Judges, and HELLERSTEIN, Senior
District Judge.**

       The Estate of Ellen D. Foster (the Estate) appeals from a decision of the tax

court finding an estate tax deficiency of $3,253,910. Because the parties are

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
             The Honorable Alvin K. Hellerstein, Senior District Judge for the U.S.
District Court for the Southern District of New York, sitting by designation.
familiar with the facts and procedural history of this case, we repeat only those

facts necessary to resolve the issues raised on appeal. We affirm.

      As a preliminary matter, we reject the Estate’s argument that the tax court

erred in valuing the marital trusts’ assets, rather than Ellen Foster’s beneficial

interest. The Estate expressly acknowledged on its tax return that “the assets of all

three marital trusts are includible in the estate of the decedent,” and its expert

provided valuations of the assets in the marital trusts. Because the Estate proffered

evidence of the value of the underlying assets, it may not now argue that the tax

court erroneously considered the value of those assets. Cf. Sovak v. Chugai

Pharm. Co., 280 F.3d 1266, 1270 (9th Cir. 2002).

      Further, the tax court did not err in declining to apply discounts for hazards

of litigation, lack of control, or lack of marketability. The plaintiffs in the Keach

lawsuit did not seek to recover specific, unique assets from the defendants, and the

Keach lawsuit did not cloud the title of the trust assets. Because a hypothetical

buyer of the trust assets would not become a defendant in the Keach lawsuit, the

tax court properly rejected any hazards of litigation discount. See Shackleford v.

United States, 262 F.3d 1028, 1031 (9th Cir. 2001). Similarly, the tax court

properly declined to apply discounts for lack of control and lack of marketability.

As the tax court correctly observed, the freeze applied to Ellen Foster, not the


                                           2
underlying trust assets. And the tax court did not clearly err in finding that the

freeze was “loosely enforced.”

      Finally, the tax court properly rejected the Estate’s alternative argument that

the estimated date-of-death value of the Keach lawsuit was deductible as a claim

against the Estate. Because the lawsuit was disputed at the date of Ellen Foster’s

death, post-death events may be considered in computing the allowable deduction.

See Estate of Saunders v. Comm’r, —F.3d—, 2014 WL 949246, at *4 (9th Cir.

Mar. 12, 2014). Further, in view of the sharp discrepancies in expert valuations of

the lawsuit, the tax court correctly concluded that the lawsuit’s estimated date-of-

death value was not ascertainable with reasonable certainty. See id. at *6–7. The

Estate’s argument to the contrary confuses the valuation of assets held by an estate

with the deduction for claims pending against an estate. Id. at *6.

      For the foregoing reasons, we affirm the decision of the tax court.

      AFFIRMED.




                                          3
