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For the reasons discussed below, we disagree with the estate on
both points.
IV. The Stipulation of Facts Does Not Preclude Respondent From
Arguing That the Estate Will Fail To Meet the Requirements
of Section 2057(b)(1)(C) Even If the Two Corporations Are
Aggregated.
The estate claims that respondent’s argument is contrary to
the stipulation of facts entered into by the parties. In
particular, the estate cites paragraph 15 of the parties’
stipulation of facts, which states:
15. The value of the combined interest in Keeton
Corrections, Inc. and Non-Secure Programs Inc. exceeds
50% of the decedent’s adjusted gross estate.
The estate claims that respondent’s argument is an “attempt to
mislead this Court.” We disagree. The estate may not rely on
the above stipulation. The stipulation as worded does not
contradict what respondent is arguing. The stipulation says that
the combined value of the interests in Keeton Corrections and NSP
is greater than 50 percent of the adjusted gross estate.
However, that is not what the statute requires. In order to
obtain the deduction, section 2057(b)(1)(C) requires that the
combined adjusted values of the qualified family-owned business
interests exceed 50 percent of the adjusted gross estate. These
are not just semantics--section 2057 devotes two entire
subsections to defining and providing formulas for the terms
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