- 3 -
interest in Dune Lakes, Ltd. (Dune Lakes).2 Another adjustment
related to an account receivable due the decedent from Dune
Lakes. Paragraphs 2 and 4 of the SPA address these adjustments.
Paragraph 2 provides:
That the value of the underlying real estate assets of
Dune Lakes, Ltd. (adjustment b in the notice of deficiency
for the tax year ending April 27, 1987) is determined to
be $4,800,000.00 without consideration of any discounts, if
applicable. The amount of any discounts is still in
dispute.
The parties agree that the amount of $671,688.00 shown
on the books of Dune Lakes, Ltd. for the year ending
December 31, 1987, as loans from stockholders will be
disregarded for purposes of valuing the stock and assets of
Dune Lakes, Ltd.
Paragraph 4 provides:
That of the adjustment of $83,961.00 for Schedule C -
Mortgages, Notes and Cash (adjustment c in the notice of
deficiency for the tax year ending April 27, 1987),
Respondent concedes $164,436.00 of the adjustment - Item
27(a) Dune Lakes Limited, and $1,743.00 of the adjustment -
Item 27(a) “Open book account”. Petitioners make no
concessions. There is no amount left in dispute.
The parties’ memoranda in support of their respective Rule
155 computations incorporate the SPA and the issues decided by
the Court in T.C. Memo. 1994-539. However, the parties failed to
agree as to how two of the issues, agreed to in the SPA, were to
be reflected in the calculations of petitioner’s estate tax
liability for the years at issue. The parties, therefore, filed
2 The valuation of Dune Lakes was at issue and was
addressed in our prior memorandum opinion. Accordingly, for
factual background relating to the corporation see T.C. Memo.
1994-539.
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