Estate of Shapiro v. United States
634 F.3d 1055
9th Cir.2011Background
- Shapiro and Chenchark lived together 22 years, never married; Chenchark provided homemaking services and managed household tasks.
- Shapiro paid living expenses and gave her a weekly allowance; Chenchark contributed no financial assets.
- Chenchark sued in Nevada for contract-type claims while Shapiro died in 2000; estate tax return filed in 2001 with a large deduction claim pending.
- District court held Chenchark’s homemaking services lacked consideration under Nevada law; estate’s deduction denied and gifts argued.
- Ninth Circuit reversed, holding the district court misread Nevada law on cohabitant contracts and that value must be determined, not precluded as zero.
- Issues on remand include valuation of Chenchark’s claim as of death and whether services can constitute adequate consideration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether homemaking services can constitute adequate consideration for §2053 deduction | Chenchark provided valuable consideration via homemaking services. | Such services do not constitute adequate consideration for a deductible claim. | Valueable consideration possible; remand to determine amount. |
| Whether the claim must be valued as of the decedent's death for §2053 purposes | Value determined at death is appropriate for deduction. | Valuation date not specified; other standards may apply. | Valuation must be as of death; factual issue for remand. |
| Whether the district court correctly treated the claim under federal tax law independent of Nevada contract law | Federal §2053(c)(1)(A) requires full, adequate consideration; Nevada law relevance limited. | State-law considerations govern contract formation for the deduction. | District court misapplied state-law; federal standard controls; remand for factual valuation. |
Key Cases Cited
- Marvin v. Marvin, 18 Cal.3d 660 (Cal. 1976) (cohabitants may contract; except sexual services)
- Hay v. Hay, 100 Nev. 196 (Nev. 1984) (unmarried cohabitants may sue to enforce property contracts)
- Western States Construction, Inc. v. Michoff, 840 P.2d 1220 (Nev. 1992) (cohabitants’ conduct shows intent to share property)
- Leopold v. United States, 510 F.2d 617 (9th Cir. 1975) (exceptional circumstances may allow 2053 deduction when adequate and full consideration)
- Taft v. Comm'r, 304 U.S. 351 (Supreme Court 1938) (state-law enforceability not determinative for federal tax deduction)
- United States v. Stapf, 375 U.S. 118 (Supreme Court 1963) (deduction not predicated solely on enforceability under state law)
- Estate of Van Horne v. C.I.R., 720 F.2d 1114 (9th Cir. 1983) (valuation basis for claims against estate in 2053 context)