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were about $800,000, which resulted in a $100,000 cash
distribution to decedent’s living trust during December 1989.
All testing of the realty had been completed during the
spring of 1990; thereafter, the trustee set a $24 million asking
price for Residence. Decedent, throughout the entire time and
until the date of her death on May 2, 1990, resided in Residence.
The trustee received a $17,500,000 cash offer on June 8, 1990,
from a former Apple Computer executive, which was accepted on
June 11, 1990. The sale closed on June 29, 1990. Decedent’s
living trust received a $6,300,000 distribution during August
1990.
After the real estate closing, a dispute arose over the fee
of the trustee of the Liquidating Trust. During September 1991,
decedent’s living trust received a $1,500,000 distribution from
the Liquidating Trust. After the settlement of the litigation
concerning the trustee’s fee, an additional $190,000 was received
by decedent’s living trust. The parties agree that the
Liquidating Trust’s net value (without any discount) at the time
of decedent’s death was $16,779,630.
The original estate tax return, filed August 2, 1991,
reported a $6,948,806 value for decedent’s interest in the
Liquidating Trust (including a 15-percent discount). Following
respondent’s issuance of the notice of deficiency, petitioner
filed a refund claim using a 25-percent discount for
marketability. Petitioner, at trial and on brief, seeks a 50-
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