*1 (Chen rio, 99 at 932 doctrine allows persecution F.3d a fear of Marcu has well-founded asylum past persecution severe or other for local authorities. reasons). Here, Marcu and his humanitarian applicant previously held an have We political persecuted not for ac- mother were country- required to show threat they opinion; perse- political tivism or were asylum eligible for or persecution to be wide mother Ameri- cuted because Marcu’s Harpinder withholding deportation. See loyalty to can. Florence’s the United (9th 1501, Ilchert, F.3d Singh v. embassy allowing occupy the U.S. to States — Cir.1995). regulatory presumption Once fly flag over her home and its her roof— only question is triggered, relevant “the being and resulted in her home confiscated country have so conditions whether imprisonment. and sto- her torture Mareu’s longer no exists changed that the threat persecution ry examples replete with return,” “past applicant’s not whether his simply because his connections with nationwide.” experience reflected conditions political His first wife found United States. asylum country was al- she considering all majority asserts that The The Roma- lowed to visit his U.S. relatives. presented would involve Marcu the evidence government effectively forced Marcu to nian resolving dispute about factual this court The United once offered divorce her. States prop- in Romania that was current conditions opportunity asylum Marcu to seek here Maj. op. BIA. 1081. This erly before the It he out of fear for his life. declined resolving disputes factual or ease is about deny particularly seems cruel to him holding It reweighing the is about evidence. opportunity now. job, apply to BIA to which is its respectfully I dissent. presumptions regulatory appropriate weigh neutral fact-finder. the evidence requiring the INS mount

And it is about it seeks a minimal defense when

at least story asylum-seeker with a of dec-

deport an persecution to worst of the

ades-long regimes. Marcu Because

former Communist

presented that he has a compelling evidence persecution if returned well-founded fear McCLATCHY; K. OF Charles ESTATE Romania, petition. grant K. Coblentz James William representatives, McClatchy, personal Pe III. titioners-Appellants, deny- BIA its also abused discretion past per- claim ing asylum Marcu’s based OF INTERNAL COMMISSIONER analysis provided secution. REVENUE, Respondent- actions were “[t]he BIA awas statement Appellee. in nature to war- severe atrocious not so or asylum for humanitarian reasons.” rant No. 97-70128. analysis any BIA to include failed Appeals, United States Court 45-year of Marcu his

why the torment Ninth Circuit. sufficiently severe atro was not mother INS, Rodriguez-Matamoros v. See cious. Argued and Submitted Dec. Cir.1996) (court must un 26, 1998. Decided June findings BIA at the how the arrived derstand decision). underlying its

Moreover, failed BIA to consider Marcu persecution reason humani- may independent mother

his asylum. See Oso- ground granting

tarian *2 Evans-Orville, Bass,

Jonathan R. Keith Coblentz, Patch, Bass, LLP, Duffy & San Francisco, California, petitioners-appel- lants. Ellisen, R. Linguanti,

Bruce Thomas V.M. Justice, Division, Department of Wash- DC, ington, respondent-appellee. TASHIMA, Before: D.W. NELSON ZILLY, Judges, Judge.* Circuit District TASHIMA; Opinion Judge Dissent Judge D.W. NELSON.

TASHIMA, Judge: Circuit “estate”) Appellants (collectively, ap- peal the Tax Court’s determination of a $1,719,411 deficiency in estate tax due from the estate. The estate contends that the Tax incorrectly Court held that stock owned McClatchy Charles K. “decedent”), (“McClatchy” or should be val- regard ued without to federal securities law marketability on applied lifetime, McClatchy during his but do not jurisdiction apply the estate. have We 7482, pursuant to 26 U.S.C. and we re- verse.

I. STANDARD OF REVIEW generally valuation of stock is fact, question of reviewed for clear error. United, Am., See Trust Servs. Inc. v. (9th Cir.1989). 885 F.2d case, however, stipu This submitted on facts, raising only question law; lated therefore, we review de novo. See Sacks v. Commissioner, Cir. Vukasovich, 1995); Commissioner, Inc. v. (9th Cir.1986). 1409, 1411 Zilly, ington, sitting by *The designation. Honorable Thomas S. States Judge District for the Western of Wasli- District stipulated facts Following submission II. BACKGROUND issues, that, the Tax Court held Board, McClatchy was Chairman of evaporated at “the securities law restrictions Officer, and Editor of Executive Chief death, ... the moment of shares (the Newspapers, “corpora- Inc. restriction, per free $15.56 *3 tion”) in 1989. of at the time his death McClatchy share.” Estate Commis v. of of common stock: corporation had two classes sioner, 206, 214, 149702 106 T.C. 1996 WL (1) traded; A, and publicly which was Class (1996). deter The court entered a decision (2) traded, B, publicly which was not Class $1,719,411 mining deficiency an estate tax of stock, into A was Class and was convertible appeals. from which the estate set forth in a subject transfer restrictions to agreement. stockholders’ III. DISCUSSION B 2 million of Class more than shares “the federal estate tax is a tax on had held them at time of his death and the transfer taxable ... dece of the of estate Because of his years. for than three more 2001(a); § dent.” United 26 U.S.C. see also and his position corporation the owner- with 57, Helvering, v. States Trust Co. 307 U.S. interest, subject McClatchy was to fed- ship (“[A]n (1939) 60, 692, 59 83 L.Ed. S.Ct. 1104 on the law restrictions sale eral securities upon of property estate tax not levied the is as an affili- of his B shares distribution Class composed. which an It is an excise estate corporation. 17 ate See C.F.R. of shifting in imposed upon the transfer of or § These restrictions limited 230.144. death.”); property Ithaca relationships to at shares, marketability McClatchy’s of result- States, 151, 155, Trust Co. v. United 279 U.S. ing per of share before in a value $12.3375 (1929) (“The 291, L.Ed. 647 tax is 49 S.Ct. 73 his death. receipt on the act of the not on testator death, however, legatees.”); Young Men’s McClatchy’s property of Upon Davis, 50, 47, estate, not an Christian Ass’n v. 264 U.S. passed to the which was shares ”) (1924) (“YMCA 291, L.Ed. 558 The estate S.Ct. corporation. affiliate (“What to law taxes is not the interest subject to the securities this was therefore legatees and succeeded applicable to decedent. The which the devisees law that, rea the interest which ceased apart from the restric- parties agree death.”). estate The value of the tions, of the stock was son the fair market value , to the of all property includes “the value per share. $15.56 therein of the decedent extent of the interest filed an tax return with The estate estate § 2033. of his death.” 26 U.S.C. at time (“IRS”) report- the Internal Revenue Service valued At issue the stock is to be is whether share, per ing value as the stock’s $12.3375 or the estate in the. hands of the decedent than million. value more $25 a total purposes. estate tax Internal Revenue The Commissioner estate (“Commissioner”) question no There is a notice of deficien- issued tax is on the transfer than mil- cy, valuing the stock at more $36 therefore, that, $5,784,910 to be lion, assessing deficiency death, “rather $1,156,982. transferred at Following a interest penalty before held the decedent than interest the IRS conceded challenge legatee after held percent death or that “blockage of 15 discount” that a States, stock, Propstra v. death.” United valuing and that used should be Cir.1982) (citing Estate parties agreed were due.1 The penalties no Bright disagreement remaining the sole banc)). (5th Cir.1981) (en subject be valued the stock should whether that, the stock argues Commissioner law restrictions to federal securities a non-affiliate estate to but did not was transferred applied which had rare those oné of apply to the estate. selling price. C.F.R. See 26 reduce the stock’s blockage likelihood discount refers A 20.203l-2(e). liquidation large of stock would block separately voting death itself alters the value of shares valued from the eases which McClatchy, 106 share. Id. The court See T.C. declined to value the (reasoning nonvoting separately voting- that the stock transferred “at shares from “ share, passed reasoning ‘predistribution’ of death and to the dece- the moment estate,” causing changes securities laws transformations value dent’s “evaporate[ brought at the moment of about ] [must restrictions to testator’s death death”). Commissioner, According distinguished] to the in value re- then, sulting from fact higher is to be valued at its that under the dece- the stock gross dent’s estate hands of the non-affiliate the assets ultimately come to rest in the hands of because the was transformed different beneficiaries.” The court there- to the estate. distribution *4 fore concluded 100 shares should be relies on Ahmanson Commissioner testator,” in “viewed the hands of the not as Found, States, 674 F.2d 767- v. United assets, separate “nothing in two because (9th Cir.1981), 68 and similar cases where suggests statutes or in the case law ... death itself alters the value the decedent’s gross valuation of the estate should take into Ahmanson, held, property. In the decedent account that the will in assets come to rest trust, through controlling a revocable a inter several hands rather than one.” Id. at 768- (600 shares) voting est common stock of 69. HFA, holding company which a owned 81 Land, partnership In a interest was re percent Savings of Home of the stock & during stricted to two-thirds its value Loan Association. Also the trust were all lifetime, partner’s upon the surviv (99 nonvoting voting 100 shares and one ing partners pay full had to value in order to share) Ahmanco, corporate a shell no with purchase interest. Because death prior to death. At assets the decedent’s “sealed the fact” that the interests would be Ahmanco uncondi moment became value, purchased at full the court ruled that tionally voting entitled to the 600 shares of the" full purposes. value controlled for estate tax stock, pursuant HFA common to declarations 03 F.2d at In Goodman v. declarations, 3 trust. Under the same Ah- (3d Granger, Cir.1957), 243 F.2d 264 another Foundation, organiza manson a charitable relies, case on which the Commissioner an tion, nonvoting became entitled to the employment provided pay contract for the Ahmanco, voting share shares 'and ment of benefits after the termination of remained in the control of Ahmanson’s fami employment, dependent upon contingencies ly. The court that valuation must stated which payments. could cause forfeiture of the any “take into transformations of the account .death, however, Upon employee’s logically prior that are to its distri possibility any contingencies of the occur beneficiaries,” bution to the and so"the Ah- ring extinguished. The court reasoned maneo shares were to be valued based on the ripened that “[d]eath the interest in the de passed 600 shares of HFA at death. Id. payments one;” ferred an into absolute con that, although at 767. The court noted death sequently, tax was measured estate usually itself alter the value of “the value of that proper absolute interest in some ty.” 243 F.2d at 269. instances, key death of a such as partner, might change the death value. cases, In clearly these is the Land, (citing at States precipitating only event and is the event (5th Cir.1962)). 170, 172 required to fix the value argued Similarly, The Foundation that the Ahmanco key partner the death of a can split shares should instantly be into two blocks for decrease the value of a business. valuation, nonvoting with its 99 Ahmanco See 674 F.2d at 768.2 But example 2. The Commissioner on relies another that assets are to be valued based on what the valuation, argue depends Ahmanson estate receives after the directives of the will are the assets that the estate in fact receives. How- carried out. See Provident Nat'l Bank v. United ever, (3d Cir.1978). posit the case cited Ahmanson does not Rath- purposes the account for valuation fact that did not effect death alone instant unitary holding val- has become value. The the testator’s in the stock’s of two or more benefi- divided the hands was transformed ue of the stock abuse.”); ciaries, Thus, Bright, would invite con- non-affiliate. estate was (“It assertion, strange indeed if the F.2d trary to Commissioner’s the estate tax value of block stock would transformed distri- property was not depending vary legatee to whom it If had been bution to the estate. the estate devised.”). affiliate, law still was an securities . applied. See 17

would have C.F.R. distinguish attempts Commissioner 230.144(e)(3)(v) (setting § forth restrictions by differentiating present case between by an affiliate estate but on sale of securities to the and to beneficiaries distribution es- providing no limitation for legatees, or but the authorities he cites do tate). fact, In support his contention. Bright, rejected government’s the court or non-affiliate status of The affiliate argument that the iden- depends the executor decedent’s husband’s on the status of any tity similar as executor and trustee was relevant to person who serves “in other 230.144(a)(2)(h). of the estate.3 Id. 1002-07.4 capacity.” valuation 17 C.F.R. *5 for, Furthermore, the Land line representatives the estate were and Ahmanson personal distinguish testamentary days until cases between trans- letters 25 of not issued estate and transfer to beneficiaries McClatehy’s after death. The restrictions fer the legatees, suggests. evaporate at of or as the Commissioner did not the moment therefore death. position lead to The Commissioner’s would anomaly es- following by described the

Making depen- of estate tax the the amount A, affiliate, Taxpayer in or non-affiliate status of tate its brief: dent on affiliate B, non-affiliate, $1,000,- Taxpayer a each own principle that the executor contradicts stock, worth of but because the securi- depend on the status 000 valuation should restrictions, Taxpayer laws A’s shares recipient. See Estate Bonner v. Unit- ties (5th Cir.1996) (the $800,000. Taxpayer A’s es- 196 fact worth are ed executors, prop- uses non-affiliate while partial held interest tate that decedent Thus, erty Taxpayer affiliate executors. remaining interest was B’s uses whose held dies, $800,000 Taxpayer A his interest estate when trust that was included decedent’s $1,000,000 whereas merged for worth to his the interests to be did not allow estate); $1,000,000 worth Taxpayer B’s interest ownership by assets 100% that, (“To $800,000 Ahmanson, by using his. The result is F.2d at 768 take into 674 post- er, pre-death and the between the moment “[t]he stated that correct value court purposes tax is not the value after directives at 1096. While distribution moment.” Dissent present implemented value but the at the are Bright pre-death post-distri- did address operative when the will becomes time moments, govern- bution it also addressed subject and the interest becomes argument regarding husband's status ment's omitted). (footnote directives." Simi- future Bright, F.2d at of the estate. See 658 as executor Land, Goodman, and the court lar to quoted by passage dis- 1002. dissent The changes in value which are occa- reasoned that trustee, post-dis- status as cussed the husband’s (whether itself because death sioned death tribution, clearly also considered court extinguishing contingencies or fixes the value executor, distribution to the his status as before the decedent has directed certain because any (rejecting family attru- trust. See id. death) upon to occur should taken identity “as exec- on the husband's bution based valuing property. These di- into account trustee"), ("the 'willing can- solely by the utor or seller' rectives are occasioned testator's By Bright fix the value of the or death and alone contrast, Mr. as executor not be identified with status of trustee”). the affiliate or non-affiliate therefore, and, stock, solely determined the dece- are not Bright government relying on was 4. The dent’s death. theory, analysis family but the court's attribution apply as well where the decedent and conclusion inapposite argues Bright dissent that family. belong do not to the same “exclusively and executor it addressed contrast executors, corporation, depressing a non-affiliate affiliate their value to a more valuable asset than an reported who transfers the estate. The Tax Code decedent, pays affiliate less estate tax than itself defines the value of the estate for es- the affiliate decedent. purposes tate tax to include “the value of all property to the extent of the interest therein ar- We also note that Commissioner’s of the decedent at the time of his death.” 26 gument position in this case contradicts the added); (emphasis § U.S.C. see also he took Citizens Bank & Trust Co. v. (estate YMCA, U.S. S.Ct. (7th Cir.1988). Commissioner, 839 F.2d 1249 tax “the is on interest which ceased rea- Bank, siblings In Citizens four who owned 25 death”).5 son of the percent family corporation placed each of a their stock in identical trusts which became Finally, the Commissioner’s contention days irrevocable after 20 hypothetical “willing buyer willing within the settlor. One of them died four determining seller” method of fair market days, valuing the stock for estate tax begs question. value is determinative gift purposes, argued taxpayers 20.2031-l(b) (“The See 26 fair mar- C.F.R. marketability percent for a 90 discount due ket value in a [of estate] placed to restrictions the stock price is the at which the irrevocability reject- of the trusts. The court change willing buyer hands between a and a accepted government’s ed this claim and seller____”). willing ar- Commissioner argument the stock should be valued gues depends hypothet- that valuation on-the regard without for the trusts. Id. at buyer purchasing ical the stock not from govern- that' the 1253-55. court stated decedent but from the estate. relying ment “on a line of cases that infer ... that value is to be measured at the transfer, “willing buyer willing

instant before so the amount *6 value, depends posits tax on seller” hypothetical of transferred method not .the tjie property in rath- buyer, hands but also a seller. See hypothetical of transferor er than its value the hands of the transfer- Propstra, (willing 1251-52 seller added). (emphasis ee.” Id. at 1251 In Citi- hypothetical estate); is seller rather than the Bank, the in the at, zens stock’s value reduction Bright, (willing seller is by trust was about instruments brought hypothetical). rejected In Propstra, we themselves, by the of transfer the stock to government’s claim that undivided one- by effected death. the trust See id. 1255. ¡property half interest in real should be val Yet, government argued, and the court half, ued as if it would with be sold the other agreed, that the stock should be valued be- stating, objective, “[t]he use of an standard transfer, fore the the testator’s hands. avoids the uncertainties that would otherwise if attempted be inherent valuation methods holding The Tax Court’s contravenes the estates, general to account for the principle that likelihood that tax is measured “[t]he by legatees, or heirs by the value would sell their interests of assets transferred reason death, together of with being value that which others who hold undivided in critical property.” terests in determined as of the time of death.” 680 F.2d at 1252. Good- man, 269, quoted McClatchy, 243 F.2d at The court thus fair stated that market value by buyers at 214. At the time of T.C. should be defined both and sellers belonged McClatchy, hypothetical. an affiliate of that are See id. argues that the The dissent estate tax is as- exists in the hands of the estate rather than as it estate, against against might subsequently sessed the decedent's if exist divided." 706 F.2d at added). therefore, (emphasis Cuny, the decedent. Dissent at 1095. While this is is dis- true, clearly tinguishing 26 U.S.C. states that between the value in the hands of the by subsequently of the estate is measured value interest of estate and the value as divided among legatees. regarding the decedent at the time of his death. The dissent Its statement when Curry holding prop- quotes property that also Estate is to be valued is not relevant to the here, erty addressing is to be valued in the hands of the estate. issue we are which distin- states, Curry actually guishes Dissent at 1095. What between the value hands of the however, "property is to be as it decedent and the hands of the estate. (9th Cir.1981), ease, directly on identity status F.2d 761 instant In the Ahmanson, very issue. hypothetical point. is the In seller this court distin- agree with the estate therefore guished “pre-distribution” We between willing “offers no buyer seller” test “willing “post-distribution” transformations especially since guidance” this property. In the value of a figures market val- agree on for fair parties of the Ahmanson court: words ue, figure to only question is which Ordinarily itself death does not alter the accept. the decedent. in a few ... instances IV. CONCLUSION change the value occa- in the stock’s value was The increase ... valuation should take into account sioned, to a transfer brought transformations about those estate; not alter death alone did non-affiliate go into aspects which Moreover, the estate value. the value of logically prior to effect the distribution by the decedent interest of the is determined gross estate to the benefi- Therefore, the stock at the time of death. ciaries. in the hands of the dece- be valued should (citations omitted). Applying the Id. at 768 RE- Tax Court is dent. The decision Ahmanson to the language of in- logic and VERSED, to enter a decision with directions case, McClatehy’s stant death altered for the estate. causing the shares value of his NELSON, dissenting: Judge, D.W. Circuit passed to his to be voiding thereby that had majority recognizes, the sole issue As the previously attached account in this is whether for consideration case in Ahman- MeClatchy’s affiliate status. As holding that the securi- Tax Court erred son, transformation at issue here —the to shares ties law restrictions that attached during his lapse of stock owned of the securities restrictions —went tax did not affect the federal estate lifetime to the distribution of into effect McClatehy’s I liability estate. Because McClatchy’s property to his beneficiaries. Court’s decision believe pre-distribution Under correct, respectfully from the ma- dissent considered deter- jority’s opinion. liability. mining *7 is not The federal tax assessed the Ahman- hypotheticals offered against the dece- against the the son court to illustrate difference between (“A 2001(a) dent’s estate. See U.S.C. pre-distribution post-distribution trans- hereby imposed on the transfer tax is fully sup- property in a decedent’s formations every ais estate of decedent who taxable example, port For the Tax Court’s decision. States.”); citizen or resident the United following Ahmanson posed court sce- the States, Curry F.2d Estate figure public his execu- nario: ordered “[I]f n 1983) for (holding Cir. that papers, burn his and then to to shred and tor be valued purposes “property is to newspaper, over to turn the ashes estate”). In in the hands of the as it exists the value of be counted to view, McClatchy’s stock my it follows that Here, ashes, papers.” than the rather in the it existed properly that McClatehy’s estate ordered estate, it existed of his rather than as hands to transferred his executors stock be hands. The Tax Court therefore in his own his Like beneficiaries. being distributed deciding in not err that securities did example, Ahmanson papers restrictions, to the shares which attached be valued in the aftermath should McClatchy’s possession, vanished in while transformation, free pre-distribution passed the shares moment death when the stock that attached while the restrictions subject to the McClatchy, an affiliate McClatchy’s possession. was still restrictions, to his estate. majority reasons that whereas opinion, explained in its As the Tax Court States, in the Ahmanson Foundation v. United property Ahmanson example changes “ashes” was occasioned “death proper- the value of a decedent’s alone,” transformation in the ty. case at bar was occasioned the non-affili- proper Because the focus this case is on of decedent’s estate. Given that ate status pre- post-distri- difference between papers hypothetical in the Ahmanson estate, changes bution. in the decedent’s were not burned shred as a direct result Bright that believe Estate v. United but rather as the (5th Cir.1981), 658 F.2d 999 on which result of an order contained within the estate McClatchy majority rely, inappo- and the plan, piajority’s I find the uncon- distinction In site. that the Fifth Circuit held that vincing. property is to be pur- valued for estate tax Moreover, I believe that the Fifth Circuit’s poses in the hands of the Land, opinion in United States v. legatee hands of the after distribution. The (5th Cir.1962), majority.cites which Bright exclusively court addressed the con- decision, only support of its bolsters Tax pre-death trast between the moment and the reasoning. Court’s court held that Land post-distribution moment: determining tax, the federal estate restric Bright [T]he fact that Mr. and Mrs. held tions applicable virtue of the decedent’s during their- stock her as a lifetime control disregarded: in life status block of 55% is an irrelevant fact. It is a To the fair market find value of a fact which antedates her and no interest at the put decedent’s death we longer exists at the time of her death. position potential ourselves1 of a suggests Dictum Land' also that purchasér of the interest at time. post-death fact-that the estate’s 27.5% will person would not Such be influenced in by past pass Bright to Mr.

his calculations as trustee .risks had of the testa- mentary failed to materialize or restrictions that trust-is also irrelevant. risks, had ended. Death tolls the bell for only Id. at 1002. periods Concerned with the contingencies, or restrictions which exist pre-death post-distribution, Bright only during the life of the decedent. pre-distribution not involve a value transfor- Here, McClatehy’s Id. at 173. death “tolled mation present like one issue in the bell” the securities law restrictions case. only during that existed his lifetime. In the This case is one of the “few instances” Court, words of the the restrictions where itself —not distribution— “evaporated at the moment of death.” the value of ' McClatchy attempts to confuse the issue (“[I]n decedent. 674 F.2d at 768 by obscuring the difference between the a few instances ... change death does (cid:127) subsequent to his transfer estate and the Land, property.”); value of the see also legatees. transfer his beneficiaries or (“It at 172 in the few cases maintains, example, value, where death alters as well as owner- “[ejhanges in the value of an asset which ship, necessary that it is to determine wheth- *8 identity occur reason of the and status of er the value at the time of death reflects the recipient, ignored death____”). change caused majority purposes.” McClatchy’s estate tax use of the resolves relying this case on the familiar generic “recipient” term blurs the line be- (a distinction between the estate tax tax on beneficiary tween the. estate and the ultimate the passing property) and the inheritance of the decedent’s interest. Of (a receipt tax on the course, it is well-established beneficiaries). decedent’s This howev- resulting from distribution to beneficia- er, does not at all concern the moment of legatees ries are accounted for in Rather, distribution or inheritance. it in- See, determining the e.g., federal estate tax. pre-distribution volves a value transforma-

Ithaca Trust Co. v. United 279 U.S. resulting tion (1929). passing of shares 151, 155, 49 S.Ct. 73 L.Ed. 647 and should be consid- this court held in Ahmanson that sharp there is a ered accordance with other distinction for estate tax cases of its purposes pre- post-distribution between properly kind. The Court considered by as- pre-distribution hands of his in the sessing estate. dissent. respectfully Chambers, SANCHEZ; Gary V. E.

James Plaintiffs-Appellees, CO., Delaware cor POWDER

PACIFIC Co., Powder Alaska-Pacific poration; doing corporation business Alaskan Dyno Washington; No State doing Inc., corporation bel, a Delaware Washington, in the State

business

Defendants-Appellants. 97-35050, and 97-35225. 97-35215

Nos. Appeals, States Court

Ninth Circuit. 4, 1998.

Argued and June Submitted 29, 1998.

Decided June