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The company’s administrative offices were understaffed and,
because of the company’s New York City location, it was difficult
to recruit workers with a satisfactory knowledge of horticulture.
Trends In the Horticultural Industry. Retail sales of
horticultural products increased approximately $500 million
(2-3 percent) from 1989 to 1990. That rate constituted a
decreased rate of growth from previous years. Some of the
industry growth at the retail level came from sales of imported
horticultural products. Because the company sold products only
to wholesalers, it did not necessarily benefit from retail
growth.
In addition to foreign competition, the company faced
competition from mass merchandisers and discounters. The growing
presence of those competitors at the retail level exerted
downward pressure on wholesale prices, adversely affecting the
company, which sold to wholesalers.
Finally, the company did not make arrangements to secure
exclusive sources of supply for its specialized products, whereas
the company’s competitors had made such arrangements. Those
arrangements enabled the company’s competitors to command higher
prices for their goods.
Estate Tax Return
The executors timely filed Form 706, United States Estate
(and Generation Skipping Transfer) Tax Return. On that return
the executors reported that the value of decedent’s shares was
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