Betty W. Thompson - Page 4

                                         -4-                                          
               The Court decides the motion for litigation and                        
          administrative costs based upon the pleadings, petitioner's                 
          motion with attached exhibits, respondent's response with                   
          attached exhibits, petitioner's reply to respondent's response              
          with attached exhibits, the parties' stipulations, and                      
          petitioner's additional affidavit.  The relevant facts as drawn             
          from the record are set out below.                                          
                                     Background                                       
               Petitioner and Mr. Thompson resided at Milledgeville,                  
          Georgia, at the time the petition in this case was filed.                   
          Mr. Thompson is the chief executive of and principal shareholder            
          in T & S Hardwoods, Inc. (the Company).  The Company is a closely           
          held family corporation located in Milledgeville, Georgia.  The             
          Company is engaged in the operation of hardwood sawmills.                   
               On August 8, 1988, Mr. Thompson made gifts of stock in the             
          Company to his son and two daughters.5  On April 18, 1989, the              
          Internal Revenue Service received a Form 709, United States Gift            
          and Generation-Skipping Transfer Tax Return, signed by L. N.                
          Thompson, Jr., as donor.  Petitioner also signed the return                 
          indicating her consent to "split-gift" treatment under section              



               5Petitioner and Mr. Thompson had given "split gifts" of                
          stock in the Company to their children in the years 1986 and 1987           
          that reduced the amount of unified credit available for                     
          application to the tax on the gifts made in 1988.  See sec.                 
          2505(a).  This issue has been settled by agreement of the                   
          parties.                                                                    




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