Estate of Rose D' Ambrosio, Deceased, Vita D'Ambrosio, Executrix - Page 4

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          her preferred stock.  On September 1, 1987, when Decedent was               
          80 years old, she and Vaparo agreed that Vaparo would buy the               
          remainder interest in these 470 shares.  Under the agreement,               
          Decedent sold Vaparo the remainder interest and retained the                
          income interest in the shares for life.3  The remainder interest            
          in the shares was worth $1,324,014 at the time of sale, and the             
          total value of the shares was $2,350,000.4  Decedent received a             
          private annuity worth $1,324,014, in consideration for the sale.            
               Decedent died on May 25, 1990, after receiving annuity                 
          payments totaling $592,078.  Decedent never sold, relinquished,             
          or otherwise disposed of her income interest. Respondent                    

          3 Decedent reported $23,500 in dividends from Vaparo on her                 
          1987 Federal income tax return.  For her 1988 through 1990                  
          taxable years, Vaparo did not declare any dividends, and Decedent           
          did not report any dividend income from Vaparo.                             
          4 The parties determined the value of the remainder interest                
          in Decedent's preferred shares by multiplying the shares' fair              
          market value by the appropriate remainder factor contained in the           
          actuarial tables under sec. 20.2031, Estate Tax Regs.  As                   
          stipulated by the parties:  "The parties agree that this is a               
          correct valuation of the remainder interest in the preferred                
          stock."  In view of this stipulation, we need not and do not                
          consider the value of Decedent's preferred shares from a factual            
          viewpoint, including the related question of whether Decedent's             
          reserved life estate in a noncumulative preferred stock from                
          which she received no dividends following the transaction at                
          issue actually had value.  Cf. Berzon v. Commissioner, 63 T.C.              
          601, 618-620 (1975), affd. 534 F.2d 528 (2d Cir. 1976).  The                
          actuarial tables are presumptively correct, and the record that             
          the parties agreed to does not require the conclusion that                  
          Decedent's use of the tables is "unrealistic and unreasonable" as           
          in Froh v. Commissioner, 100 T.C. 1,4 (1993), affd. without                 
          published opinion 46 F.3d 1141 (9th Cir. 1995).                             

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