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received their interests in stock of Hondo from Birnie in July of
1980.
On November 28, 1980, Patricia Vestal, Gordon Davenport, and
Charles Botefuhr executed an agreement. In the agreement it was
recited that Charles Botefuhr had been given 537 shares of Hondo
stock by instrument dated July 7, 1980, executed by Birnie
Davenport. In the agreement it was recited that Charles Botefuhr
had agreed with Birnie at the time of the gift of stock that he
would file the requisite Federal and State gift tax returns and
pay all taxes. Pursuant to the agreement, Charles Botefuhr
agreed with Gordon Davenport and Patricia Vestal that he would
file the gift tax returns with respect to the gift of July 7,
1980, and pay any gift taxes due with respect to the gift.
Charles Botefuhr did not file any gift tax returns on behalf of
Birnie.
Charles Botefuhr redeemed his 537 shares of Hondo stock on
July 15, 1981, for $2,190 per share. Prior to redeeming his
stock, Charles Botefuhr received dividends in 1981 with respect
to his 537 shares of Hondo stock in the amount of $8,055. Gordon
Davenport received dividends in 1981 with respect to his 537
shares of Hondo stock in the amount of $16,110.
While preparing Birnie's estate's tax returns, Ms. Childs
discovered that no Federal gift tax return had been filed with
respect to the Hondo stock transfer to Charles Botefuhr on July
7, 1980. She then prepared a gift tax return with respect to the
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