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claimed on the Federal estate tax return, respondent determined a
deficiency of $1,985,624 in petitioner’s Federal estate tax.
Petitioner petitioned this Court for a redetermination.
In Mueller I, we found that the date-of-death value of the
shares was $15,170,800, or $1,700 per share. Our revaluation,
standing alone, would result in an increase in Federal estate tax
of $957,099, computed at the top marginal estate tax rate of 55
percent in effect during 1986, prior to allowance of additional
credits for State death taxes and for tax on prior transfers and
a small reduction in the unified credit.
The Administration Trust is a revocable inter vivos trust
established by decedent3 and is the residuary legatee of her
probate estate.4 Under Article IV of the trust instrument, the
Administration Trust is obliged to pay all death taxes, but
Article III of the second codicil to decedent's will directs that
all death taxes be first paid out of decedent's probate estate as
3The beneficiaries of the Trust are three subtrusts: The
first for the benefit of decedent’s niece Mary M. Hanson and
decedent’s friend Jean Ehlinger and the two other subtrusts known
as the Bessie I. Mueller Irrevocable Trusts A and B for the
benefit of decedent’s grandchildren: Justin R. Mueller, Anne E.
Mueller, and Heidi M. Mueller.
4The noncharitable legatees of decedent’s estate are
decedent’s sons John S. Mueller and James F. Mueller; decedent’s
two granddaughters by son John, Anne E. Mueller and Heidi M.
Mueller; Bessie I. Mueller Irrevocable Trusts A (f/b/o grandson
Justin R. Mueller) and B (f/b/o granddaughters Anne E. Mueller
and Heidi M. Mueller); the Bessie I. Mueller Administration
Trust; decedent’s niece Mary M. Hanson; friend Jean M. Ehlinger;
decedent’s nephew William E. Pearson; and friend Harriet Suggs.
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