Jeffry A. Bernstein and James P. Mitchell, for petitioner.
Kathryn K. Vetter, for respondent.
OPINION
NIMS, Judge: In this case, respondent determined a
$5,784,910 Federal estate tax deficiency, and a $1,156,982
addition to tax under section 6662(b)(1). Unless otherwise
indicated, all section references are to sections of the Internal
Revenue Code in effect at decedent's date of death, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
After concessions, the sole remaining issue for decision is
whether certain securities law restrictions that applied to
shares of stock of McClatchy Newspapers, Inc. (the Company) owned
by decedent during his lifetime, but which became inapplicable by
reason of decedent's death, have the effect of limiting the value
of the shares for purposes of establishing the Federal estate tax
liability of decedent's estate.
The parties submitted this case fully stipulated, and the
facts as stipulated are so found. William K. Coblentz and James
McClatchy, decedent's executors, resided in California when they
filed the petition in this case. Decedent's will was probated in
the Superior Court of Sacramento County, Sacramento, California.
The decedent, Charles K. McClatchy, died on Sunday, April
16, 1989. At his death, he owned 2,078,865 Class B Shares of the
Company. The Class B Shares were reported by petitioner on Form
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