Estate of Rose D' Ambrosio, Deceased, Vita D'Ambrosio, Executrix - Page 2

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               Harvey R. Poe, for petitioner.                                         
               Frank A. Racaniello, for respondent.                                   


               LARO, Judge:  The parties submitted this case to the Court             
          without trial.  Rule 122.  The Estate of Rose D'Ambrosio,                   
          Deceased (hereinafter Decedent's estate), Vita D'Ambrosio,                  
          Executrix (hereinafter the executrix), petitioned the Court to              
          redetermine respondent's determination of an $842,391 deficiency            
          in the Federal estate tax of Decedent's estate.  We must decide             
          whether Decedent's gross estate for Federal estate tax purposes             
          includes the value of 470 shares of preferred stock in which                
          Decedent retained an income interest for her life, after she                
          transferred the remainder interest in the stock for its fair                
          market value.  We hold that Decedent's gross estate includes the            
          date-of-death value of the stock, reduced by the value of the               
          consideration she received in return for the remainder interest.            
          Unless otherwise indicated, section references are to the                   
          Internal Revenue Code in effect for the date of Decedent's death.           
          Rule references are to the Tax Court Rules of Practice and                  

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