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Pursuant to a closing statement dated April 26, 1984, the Cluck
brothers transferred the Grapevine property to Joe L. Wright for
a net sale price of $2,477,700. Each brother's share of the net
sale proceeds was one-fourth of $2,477,700, or $619,425. Elwood
did not report the sale of the Grapevine property on his 1984
Federal income tax return, on the theory that his basis in the
one-fourth interest sold was equal to or exceeded the proceeds he
received from the sale.
On March 10, 1988, respondent issued a notice of deficiency
to the "Estate of Martha K. Cluck, Elwood Cluck, Executor"
(Estate case). In the notice, respondent determined that, on the
date of her death, Martha Cluck owned the entire 149.67 acres
located in Grapevine, Texas, rather than a one-half interest as
reported in the Estate's tax return. Respondent further
determined that the date of death fair market value of the
decedent's interest was $2,548,242, rather than $527,250 as
reported on the Estate's tax return. Respondent issued similar
notices to each of Elwood's three brothers, apparently naming
each as "Executor".6 Thereafter, Elwood and each of his brothers
timely filed petitions for redetermination with this Court.
In his petition, Elwood alleged that respondent erred
in determining that Martha Cluck owned the entire 149.67 acres of
6 Actually, Martha K. Cluck died intestate, and her four sons
were thus beneficiaries, and thus potentially liable as
transferees for any unpaid Federal estate tax owed by her estate.
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