FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MARSHALL NAIFY REVOCABLE 

TRUST; MICHAEL NAIFY, Trustee,

successor in interest to the Estate No. 10-17358

of Marshall Naify, D.C. No.

Plaintiffs-Appellants,  3:09-cv-01604-CRB

v. OPINION

UNITED STATES OF AMERICA,

Defendant-Appellee. 

Appeal from the United States District Court

for the Northern District of California

Charles R. Breyer, District Judge, Presiding

Argued and Submitted

December 9, 2011—San Francisco, California

Filed February 15, 2012

Before: Arthur L. Alarcón, Consuelo M. Callahan, and

N. Randy Smith, Circuit Judges.

Opinion by Judge Alarcón

1801
COUNSEL

G. Michael Halfenger (argued), Foley & Lardner LLP, Milwaukee, Wisconsin; Thomas F. Carlucci, Foley & Lardner

LLP, San Francisco, California; Joseph G. Wolberg, Kentfield, California, for the appellants.

NAIFY REVOCABLE TRUST v. UNITED STATES 1803
Jennifer M. Rubin, United States Department of Justice, Tax

Division/Appellate Section, Washington, D.C., for the appellee.

OPINION

ALARCÓN, Senior Circuit Judge:

This is a federal estate tax refund action. Before his death

in 2000, Marshall Naify (“Naify”) took considerable steps to

avoid paying California income tax on $660 million in capital

gains.1 After his death, the estate of Marshall Naify (“Estate”)

deducted $62 million on its federal estate tax return for the

estimated amount of California income tax that it might owe

on the $660 million gain if Naify’s California tax avoidance

plan failed. The IRS disallowed the deduction. The Marshall

Naify Revocable Trust (“Trust”), successor in interest to

Naify’s Estate, sued for a refund. The district court granted

the Government’s motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). The Trust

appeals that decision. After reviewing the record and briefs,

we affirm.

I

Naify was a longtime California resident until his death in

April 2000.2 In December 1998, Naify began implementing a

plan to avoid paying California income tax on gains he

expected to realize from converting his Telecommunications

Inc. (“TCI”) notes into AT&T stock after TCI merged into

AT&T. As part of the plan, Naify formed Mimosa, Inc.

(“Mimosa”) as a Delaware corporation. He became its sole

1We have rounded dollar amounts to the nearest $1 million. 

2We have relied on the factual allegations in the Trust’s complaint,

along with the exhibits attached thereto and incorporated by reference. 

1804 NAIFY REVOCABLE TRUST v. UNITED STATES
shareholder, and took steps to ensure that Mimosa did not

operate in California. Naify then transferred his TCI notes to

Mimosa. After TCI merged into AT&T, Mimosa converted

the TCI notes into AT&T stock, which led to a gain of $660

million.

After Naify’s death, his Estate filed Naify’s California personal income tax return for the 1999 tax year. Naify’s return

did not report the $660 million gain as taxable income. Consequently, his return did not reflect that any California income

tax was due on the $660 million gain nor that he had paid California income tax on that gain.

Nearly a year later, in July 2001, Naify’s Estate filed its

federal estate tax return. At the time the Estate filed its return,

the California Franchise Tax Board (“FTB”) had not asserted

a claim against the Estate for California income tax on the

$660 million gain. In its return, however, the Estate deducted,

as a claim against the estate, $62 million for the estimated

amount of California income tax that Naify might owe if his

California tax avoidance plan failed.

Three months later, the FTB initiated an audit of Naify’s

California personal income tax return for the 1999 tax year.

In July 2003, the FTB issued a notice of proposed assessment

in which it asserted that Naify’s Estate owed $58 million, plus

interest and penalties, for California income tax on the $660

million gain. Naify’s Estate disputed that it owed California

income tax on the $660 million gain. After lengthy negotiations, in 2004, the Estate settled the California income tax

claim for $26 million, $7 million of which was interest.

Meanwhile, in early 2003, the IRS had initiated an audit of

the Estate’s federal estate tax return. The IRS disallowed the

Estate’s deduction of $62 million for the estimated amount of

California income tax that Naify’s Estate might owe if his

California tax avoidance plan failed. After the Estate settled

with the FTB, however, the IRS allowed the Estate to deduct

NAIFY REVOCABLE TRUST v. UNITED STATES 1805
the $26 million it paid to settle the California income tax

claim. As a result of the adjusted deduction, the Estate paid

a federal estate tax deficiency of $11 million.

In March 2006, the Estate filed a claim with the IRS for a

refund of the $11 million tax deficiency it paid when the IRS

adjusted its deduction for the California income tax claim. In

its claim, the Estate sought to adjust the deduction from $26

million to $47 million. In order to arrive at the $47 million

value, the Estate discounted the $62 million that it believed

that Naify owed in California income tax on the $660 million

by 67%, which was the probability, according to the Trust’s

expert, that Naify’s tax plan would fail.3 The IRS rejected the

Estate’s claim: it concluded that the California income tax

claim was contingent and disputed and, thus, the amount of

the deduction for the claim was limited to the $26 million the

Estate paid post-death to settle the claim.

In April 2009, the Trust, as successor in interest to Naify’s

Estate, filed a complaint against the Government in district

court. The Trust’s complaint asserted a single claim for refund

of federal estate taxes based on its allegation that the value of

the FTB’s claim against the Estate for California income tax,

as of the date of Naify’s death, was $47 million. After the

Government filed its answer, it moved for judgment on the

pleadings pursuant to Rule 12(c) of the Federal Rules of Civil

Procedure. The district court granted the Government’s Rule

12(c) motion because, inter alia, the Trust’s complaint did not

show that the estimated amount of the deduction for the California income tax claim was ascertainable with reasonable

certainty as of the date of Naify’s death and, as a result, the

Trust’s deduction was limited to the $26 million it paid to settle the claim. 

3

In an order issued before oral argument, we pointed out that the product of multiplying $62 million by 67% is $41 million, not $47 million. In

response, the Trust conceded that it had misstated the estimated amount

of the California income tax claim and clarified that it sought a deduction

of $41 million, not $47 million. 

1806 NAIFY REVOCABLE TRUST v. UNITED STATES
The district court entered judgment against the Trust on

September 15, 2010. The Trust filed its timely Notice of

Appeal on October 15, 2010. The district court had jurisdiction pursuant to 28 U.S.C. § 1346(a)(1). This Court has jurisdiction pursuant to 28 U.S.C. § 1291.

II

We review de novo a district court’s order granting a Rule

12(c) motion for judgment on the pleadings. Gearhart v.

Thorne, 768 F.2d 1072, 1073 (9th Cir. 1985). “A judgment on

the pleadings is properly granted when, taking all the allegations in the non-moving party’s pleadings as true, the moving

party is entitled to judgment as a matter of law.” Fajardo v.

Cnty. of L.A., 179 F.3d 698, 699 (9th Cir. 1999).

III

We begin our discussion with a brief overview of federal

estate tax deductions for claims against an estate. We then

turn to the merits of the Government’s motion.4

A

[1] The federal “estate tax is a tax on the privilege of transferring property upon one’s death . . . .” Propstra v. United

States, 680 F.2d 1248, 1250 (9th Cir. 1982). The federal

estate tax is imposed on the decedent’s taxable estate. 26

U.S.C. §§ 2001(a), 2053(a). The taxable estate is determined

by reducing the gross estate by deductions allowable under

the Internal Revenue Code. 26 U.S.C. § 2053(a). 

[2] Claims against the estate are one type of deduction

allowable under the Internal Revenue Code. 26 U.S.C.

4Because we affirm on the grounds set forth in Section III.B., we need

not address the Trust’s other challenges to the district court’s order dismissing this action. 

NAIFY REVOCABLE TRUST v. UNITED STATES 1807
§ 2053(a)(3). Claims against the estate are “personal obligations of the decedent existing at the time of his death, whether

or not then matured, and interest thereon which had accrued

at the time of death.” Treas. Reg. § 20.2053-4.5 Only claims

that are “enforceable against the decedent’s estate may be

deducted.” Id.; see Estate of DuVal v. Comm’r, 4 T.C. 722,

725 (1945) (recognizing that a claim is an assertion of a right

and if there is no assertion of a right, there is no claim to

deduct), aff’d, 152 F.2d 103 (9th Cir. 1946). Tax obligations

are deductible, if at all, as claims against the estate. Treas.

Reg. § 20.2053-6(a).

B

The Trust contends that the district court erred when it

determined that the estimated amount of the California

income tax claim could not be deducted because it was not

ascertainable with reasonable certainty as of the date of

Naify’s death and, as a result, its deduction was limited to the

$26 million it paid to settle the claim.

1

[3] The Treasury Regulations mandate that, in order to

deduct the estimated amount of a claim against the estate, the

estate must show that it is, inter alia, “ascertainable with reasonable certainty.”

6

 Treas. Reg. § 20.2053-1(b)(3). An estate

cannot deduct a claim based on a vague or uncertain estimate.

Id.; see, e.g., Estate of Saunders v. Comm’r, 136 T.C. 406,

5

In 2009, the IRS amended the relevant Treasury Regulations. The 2009

amendments, however, apply to the estates of decedents who died on or

after October 20, 2009. See T.D. 9468, 2009-2 C.B. 570. On appeal, the

parties agree that 2009 amendments do not apply because Naify died in

April 2000. Thus, all citations to § 2053 regulations are to the pre-2009

version. 

6The 2009 amendments to the Treasury Regulations modified this section to make it clear that contested and contingent claims are not ascertainable with reasonable certainty. Treas. Reg. § 20.2053-1 (2009). 

1808 NAIFY REVOCABLE TRUST v. UNITED STATES
422 (2011) (explaining that “stating and supporting a value is

not equivalent to ascertaining a value with reasonable certainty”). If a claim’s value is not ascertainable with reasonable

certainty, but later becomes certain, an estate may petition the

tax court or file a claim for a refund. Treas. Reg. § 20.2053-

1(b)(3).

[4] Here, the Trust’s pleading demonstrates that the estimated amount of the California income tax claim was not

ascertainable with reasonable certainty as of the date of

Naify’s death. The Trust cannot rely on its allegation that

“[o]n the date of Marshall Naify’s death, April 19, 2000, the

amount of Plaintiff ’s California tax liability was ascertainable

with reasonable certainty” because that is not a factual allegation. Rather, it is a legal conclusion that we need not accept

as true. See W. Mining Council v. Watt, 643 F.2d 618, 624

(9th Cir. 1981) (“We do not, however, necessarily assume the

truth of legal conclusions merely because they are cast in the

form of factual allegations.”).

[5] As for the Trust’s other allegations in its pleading, they

show that the FTB had not asserted, nor assigned a value to,

the California income tax claim as of the date of Naify’s

death. As the district court recognized, several post-death

events would need to have occurred in order for Naify’s California income tax liability on the $660 million gain to come

due. The FTB would need to, inter alia, (1) assert the California income tax claim by initiating an audit of Naify’s 1999

California income tax return, (2) find that Mimosa was not a

valid Nevada corporation, and (3) issue a California income

tax deficiency notice. Given that the claim was subject to several contingencies, all of which could have affected its value,

the estimated amount of the California tax claim, as of the

date of Naify’s death, was inherently uncertain.

The Trust’s general assertion that the 146 paragraph factual

summary attached to its complaint shows that it satisfies the

certainty requirement is not persuasive. The Trust has not

NAIFY REVOCABLE TRUST v. UNITED STATES 1809
identified any specific facts in the summary that show that the

estimated amount of the California income tax claim was

ascertainable with reasonable certainty as of the date of

Naify’s death. The factual summary actually shows that, as of

his death, Naify had taken considerable steps to form and

operate Mimosa as a Nevada corporation so as to avoid paying California income tax on the $660 million gain. 

Contrary to the Trust’s assertion, the expert report attached

to its complaint does not establish that the estimated amount

of the claim was ascertainable with reasonable certainty as of

the date of Naify’s death. The expert’s opinion, along with the

Trust’s own allegations, actually show that the claim was contingent and had a range of possible values between $0 and

$62 million. 

According to the Trust’s expert, Naify’s California tax

avoidance plan had a 67% likelihood of failure, which leads

to the inescapable conclusion that his plan also had a 33%

chance of success. If his plan succeeded, the California

income tax claim might never be asserted or paid. If his plan

failed, there is nothing suggesting that the amount of the

claim was reasonably certain to be $47 million, as opposed to

some other amount. As the district court recognized, “it cannot be that simply because one can assign a probability to any

event and calculate a value accordingly, any and all claims are

reasonably certain and susceptible to deduction. To so hold

would read the regulatory restriction out of existence.” Marshall Naify Revocable Trust v. United States, No. C 09-1604

CRB, 2010 WL 3619813, at *5 (N.D. Cal. Sept. 9, 2010)

(footnote omitted).

[6] Whether an action “can be dismissed on the pleadings

depends on what the pleadings say.” Weisbuch v. Cnty. of

L.A., 119 F.3d 778, 783 n.1 (9th Cir. 1997). Here, the pleadings “say” that, as of Naify’s death, (1) the FTB had not

asserted a claim against Naify for the California income tax

on the $660 million gain, (2) Naify had taken significant steps

1810 NAIFY REVOCABLE TRUST v. UNITED STATES
to avoid California income tax on the $660 million gain, (3)

Naify had not reported the $660 million gain as California

taxable income, (4) Naify had not paid California income tax

on the $660 million gain, (5) according to a post-death expert

opinion rendered six years after Naify’s death, Naify’s California tax avoidance plan had a 67% likelihood of failure and,

consequently, a 33% likelihood of success, and (6) the Estate

initially estimated the amount of the California income tax

claim, as of Naify’s death, as $62 million. Given these allegations, the district court properly concluded, as a matter of law,

that the estimated amount of the claim was not ascertainable

with reasonable certainty as of Naify’s death. 

As for the Trust’s argument that the district court misconstrued the certainty requirement by assuming that “ascertainable with reasonable certainty” applied to the estimated

amount of the claim, as opposed to the claim itself, the Trust

has not supported its reading of Treasury Regulation

§ 20.2053-1(b)(3) with citation to binding or persuasive

authority. Indeed, relevant authority directly contradicts the

Trust’s proposed reading of this requirement. See, e.g., Estate

of Van Horne v. Comm’r, 720 F.2d 1114, 1116-17 (9th Cir.

1983) (applying certainty requirement to estimated amount of

the claim); Axtell v. United States, 860 F. Supp. 795, 798 (D.

Wyo. 1994) (stating “[w]here the amount of a section 2053

deduction is not known, the deduction may nevertheless be

taken if the amount is ascertainable with reasonable certainty

and will be paid” (emphasis added)); Estate of Bailly v.

Comm’r, 81 T.C. 246, 250-51 (1983) (applying certainty

requirement to amount of § 2053(a) deduction).

Finally, the Trust’s reliance on two out-of-circuit cases,

O’Neal v. United States, 258 F.3d 1265 (11th Cir. 2001) and

Estate of Smith v. Comm’r, 198 F.3d 515 (5th Cir. 1999), is

not persuasive. Unlike this case, which involves a contingent

claim, Estate of Smith and O’Neal involve definite claims

brought against the estate, but which the estates had disputed.

See O’Neal, 258 F.3d at 1267 (claim for gift tax deficiency

NAIFY REVOCABLE TRUST v. UNITED STATES 1811
was asserted, partially paid, and disputed in court proceedings

before decedent’s death); Estate of Smith, 198 F.3d at 519 (litigation was pending at the time of decedent’s death and claim

was disputed). Additionally, neither case announces a workable rule for using expert evidence to determine whether the

estimated amount of a contingent claim is ascertainable with

reasonable certainty. See O’Neal, 258 F.3d at 1275 (remanding to district court to recalculate deduction for disputed claim

because district court erred by considering post-death events

when valuing claim); Estate of Smith, 198 F.3d at 526 (rejecting distinction between certain and enforceable claims and

disputed or contingent claims and remanding to district court

to recalculate value of disputed claim because district court

erred by considering post-death events when valuing claim).

2

[7] We have never concluded that there is a complete bar

to considering post-death events when valuing a disputed or

contingent claim. Quite the contrary, we have interpreted the

United States Supreme Court’s decision in Ithaca Trust Co.

v. United States, 279 U.S. 151 (1929), along with the relevant

statutes and Treasury Regulations, as allowing a court to consider post-death events when valuing a disputed or contingent

claim against an estate. See Estate of Shedd v. Comm’r, 320

F.2d 638, 639-40 (9th Cir. 1963) (considering post-death

events when evaluating deduction for disputed and contingent

claim) aff’g 37 T.C. 394 (1961); Estate of DuVal v. Comm’r,

152 F.2d 103, 104 (9th Cir. 1945) (considering post-death

events when evaluating deduction for contingent claim) aff’g

4 T.C. 722; see Propstra, 680 F.2d at 1253 (distinguishing

certain and enforceable claims from disputed or contingent

claims); see also Estate of Van Horne, 720 F.2d at 1116-17

(same). 

Indeed, in Estate of Shedd, we explained that Ithaca Trust’s

conclusion that “[t]he estate so far as may be is settled as of

the date of the testator’s death,” 279 U.S. at 155, is not a for1812 NAIFY REVOCABLE TRUST v. UNITED STATES
mulation of “[i]mmutable principle,” but simply a statement

“of the understanding of the courts that the general intention

of Congress is that the federal estate tax shall be computed on

the basis of the estate’s value at the moment the taxable event

(the transfer at death) occurs.” Estate of Shedd, 320 F.2d at

639. We further explained that “Congress did not intend to

make events at the date of death invariably determinative in

computing the federal estate tax obligation” and that “when it

appears that the intent of Congress will be served by considering events subsequent to death for this purpose the courts

have not hesitated to do so.” Id.

[8] In Propstra, we stated that “[t]he law is clear that postdeath events are relevant when computing the deduction to be

taken for disputed or contingent claims.”

7 Propstra, 680 F.2d

at 1253. The Trust attempts to avoid the consequences of this

Court’s precedent by arguing that our statement in Propstra,

that a court can consider post-death events when valuing disputed or contingent claims, is dicta. We disagree.

In Propstra, we addressed the question of whether an estate

could deduct the full value of undisputed pre-death liens

against a decedent’s real property even though the estate later

settled the lien claims for less than their full value. Propstra,

680 F.2d at 1253-54. We began our analysis by stating that in

order to determine whether a court could consider the postdeath settlement in valuing the lien claims, we needed to

assess the nature of the claims to determine if they were disputed or contingent. Id. at 1253. We explained our view, in

light of the precedent and the Treasury Regulations, of the rel7There is a circuit split regarding whether a court can consider postdeath events when valuing disputed or contingent claims. Compare

Gowetz v. Comm’r, 320 F.2d 874, 876 (1st Cir. 1963) (stating that court

can consider post-death events when valuing a disputed claim), and Estate

of Jacobs v. Comm’r, 34 F.2d 233, 236 (8th Cir. 1929) (considering postdeath events when valuing contingent claim), with O’Neal, 258 F.3d at

1275 (stating that court cannot consider post-death events when valuing a

disputed claim), and Estate of Smith, 198 F.3d at 529 (same). 

NAIFY REVOCABLE TRUST v. UNITED STATES 1813
evance of post-death events when valuing contingent or disputed claims: 

The law is clear that post-death events are relevant

when computing the deduction to be taken for disputed or contingent claims. See Treas. Reg.

§ 20.2053-1(b)(3) (“No deduction may be taken on

the basis of a vague or uncertain estimate.”). See

also Estate of DuVal v. Commissioner, 4 T.C. 722

(1945), aff’d, 152 F.2d 103 (9th Cir.) cert. denied,

328 U.S. 838, 66 S. Ct. 1013, 90 L.Ed. 1613 (1946).

Less certain is the relevance of post-death events

with regard to claims that are certain and enforceable

at the time of death.

Id.

We concluded, in Propstra, that the lien claims were neither disputed nor contingent and proceeded to evaluate the

relevant statutes, regulations, and case law. Id. at 1254. We

held that “as a matter of law, when claims are for sums certain

and are legally enforceable as of the date of death, post-death

events are not relevant in computing the permissible deduction.” Id. In so doing, this court distinguished Jacobs v.

Comm’r, 34 F.2d 233 (8th Cir. 1929), in which the Eighth

Circuit held that a court could consider post-death events

when valuing all claims against an estate. Id. at 1256. Specifically, we explained that the lien claims were unlike the

widow’s claim in Jacobs because the widow’s claim “was not

certain and enforceable; it was contingent.” Id.

The holding of Propstra is clear: an estate cannot look to

post-death events when valuing a claim against the estate that

is certain and enforceable as of the date of death. Id. at 1254.

We distinguished disputed and contingent claims from certain

and enforceable claims based on the Treasury Regulations,

which prohibit deducting vague or uncertain claims. Id. at

1253. We also cited Estate of DuVal, in which we affirmed

1814 NAIFY REVOCABLE TRUST v. UNITED STATES
a tax court that considered post-death events to disallow a

deduction for a contingent claim. Id.

The Trust has not shown that the relevant language in

Propstra is dicta. We have explained that “[w]hile we have

used a number of verbal formulations to describe ‘dictum,’ we

treat reasoning central to a panel’s decision as binding later

panels.” Sanchez v. Mukasey, 521 F.3d 1106, 1110 (9th Cir.

2008). Consequently, “[u]nder our circuit’s law, when a panel

selects a single line of reasoning to support its result, the reasoning cannot be ignored as dictum.” Id.

This court’s reasoning in Propstra that only contingent or

disputed claims could be valued by considering post-death

events supported its ultimate holding. Propstra, 680 F.2d at

1253-54. We also relied on this reasoning to distinguish contrary authority. Id. at 1256. For example, we analyzed

whether the lien claims were disputed or contingent based on

our statement that post-death events are relevant when valuing

such claims. Id. at 1253-54. In addition, we distinguished

Jacobs, which allows courts to look to post-death events, on

the grounds that Jacobs involved a contingent claim. Id. at

1256.

[9] Since our decision in Propstra, we have not expressly

departed from, nor expanded, our holding in that case. We

have similarly not departed from our view of the distinction

between certain and enforceable claims and contingent or disputed claims. For example, in Estate of Van Horne, this court

applied the holding in Propstra to value an undisputed and

non-contingent pre-death spousal support order as of the date

of the decedent’s death. Estate of Van Horne, 720 F.2d at

1115-16. We, along with the tax court whose opinion we were

reviewing, continued to distinguish certain and enforceable

claims from disputed and contingent claims. Id.; Estate of Van

Horne v. Comm’r, 78 T.C. 728, 735 (1982) (recognizing distinction between a certain and enforceable claim and a “potential, unmatured, contingent, or contested claim”). Indeed,

NAIFY REVOCABLE TRUST v. UNITED STATES 1815
in Estate of Van Horne, we rejected the government’s argument that the spousal support order was contingent. Estate of

Van Horne, 720 F.2d at 1116. 

More recently, in Shapiro v. United States, 634 F.3d 1055

(9th Cir. 2011), we cited Propstra for the general proposition

that claims against the estate are valued as of the date of

death. The Trust contends that, under Shapiro, the district

court could not consider the $26 million post-death settlement

as dispositive of the California income tax claim’s value. We

disagree. 

In Shapiro, we considered whether love, support, and

homemaking services provided by a cohabitant to her partner

were sufficient consideration to support a contract claim

against an estate. Shapiro, 634 F.3d at 1059. We concluded

that the district court erred when it held that such services

were not, under Nevada law, sufficient consideration to support a contract claim against the estate. Id. In reversing the

district court’s order granting summary judgment, we

remanded for the district court to determine the value of the

cohabitant’s claim. Id.

The Trust relies heavily on this court’s conclusion in Shapiro that the value of the contract claim was a factual issue

that precluded summary judgment. The Trust reads our holding in Shapiro too broadly. As we previously discussed in

Section III.B.1., whether an action can be dismissed on the

pleadings depends on what the pleadings say.

Unlike this case, Shapiro did not involve a contingent

claim. Id. at 1056. In fact, in Shapiro, we did not address the

distinction in the Ninth Circuit between certain and enforceable claims and disputed or contingent claims. Nonetheless,

the Trust suggests that Shapiro’s discussion of valuing the

contract claim as of the date of death signaled a departure

from our precedent that distinguishes between certain and

enforceable claims and disputed or contingent claims. The

1816 NAIFY REVOCABLE TRUST v. UNITED STATES
Trust, however, fails to recognize that, as a three-judge panel,

the court in Shapiro could not reconsider or overrule the precedent established in Estate of Shedd, Estate of DuVal, and

Propstra. See United States v. Gay, 967 F.2d 322, 327 (9th

Cir. 1992) (“As a general rule, one three-judge panel of this

court cannot reconsider or overrule the decision of a prior

panel.”). 

According to the Trust, even if the district court could consider post-death events under Propstra, it nonetheless erred

when it determined that the Trust’s deduction was limited to

the $26 million it paid to settle the California tax claim. We

disagree. 

[10] The Treasury Regulations suggest that a post-death

settlement is dispositive of a claim’s value. Treas. Reg.

§ 20.2053-1(b)(3). According to the Regulations, an estate

can deduct a claim, which initially had an uncertain value,

once its value becomes certain. Id. According to the Trust’s

factual allegations, the California income tax claim’s value

became certain when the Trust settled the claim. The Trust

has not pointed to any other allegation that suggests the

claim’s value became certain due to any other event. Consequently, we agree with the district court that the settlement

amount was dispositive because it “determine[d] as a factual

matter how much the claim against the estate [was] worth and

[was] the only moment at which the value of the claim

[became] ‘certain.’ ” Marshall Naify Revocable Trust, 2010

WL 3619813, at *7 n.9.

CONCLUSION

[11] We are persuaded that the district court did not err in

granting the Government’s Rule 12(c) motion for judgment

on the pleadings and dismissing this action.

AFFIRMED.

NAIFY REVOCABLE TRUST v. UNITED STATES 1817