Estate of Birnie M. Davenport, Deceased, Patricia L. Vestal, Personal Representative - Page 2

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                  Unless otherwise indicated, all section references are to                              
            the Internal Revenue Code as in effect during 1980, and all Rule                             
            references are to the Tax Court Rules of Practice and Procedure.                             
                  Respondent determined a gift tax deficiency for the estate                             
            of Birnie M. Davenport on the ground that Birnie M. Davenport                                
            (Birnie) made taxable gifts in 1980 of shares of stock in Hondo                              
            Drilling Co., Inc. (Hondo).  Respondent also determined a                                    
            deficiency in petitioner's estate tax due to an increase in                                  
            adjusted taxable gifts made in previous years.1                                              
                  The primary issues for decision are:                                                   
                  (1)  Whether Birnie owned stock of Hondo during her                                    
            lifetime; and if so,                                                                         
                  (2)  whether Birnie transferred stock of Hondo to Gordon                               
            Davenport, Patricia Vestal, and Charles Botefuhr in July of 1980;                            
            and if so,                                                                                   
                  (3)  whether Birnie's transfer of Hondo stock in July of                               
            1980 constituted a gift for Federal gift tax purposes;                                       
                  (4)  whether the 1980 Federal gift tax return filed by the                             
            Estate of Birnie M. Davenport was delinquently filed; and                                    
                  (5)  whether the period of limitations for assessing a gift                            
            tax deficiency in this case has expired.                                                     

                  1  The cases involving the estate tax and the gift tax                                 
            deficiencies were consolidated for purposes of trial, briefing,                              
            and opinion.  The parties do not address the estate tax                                      
            deficiency on brief.  We assume, therefore, that the parties                                 
            agree that our resolution of the gift tax issue will also resolve                            
            the estate tax deficiency.                                                                   




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