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transaction and filed it simultaneously with the Federal estate
tax return for Birnie's estate.
Elizabeth, Birnie, their estates, and the representatives of
their estates, consistently represented to the IRS that Elizabeth
and Birnie were joint and equal owners of various property,
including Hondo stock, title to which was in Elizabeth's name.
Hondo stock was valued for all purposes by Elizabeth and her
estate, Birnie and her estate, Patricia Vestal, and Gordon
Davenport, at $804 per share. The $804 price of Hondo stock was
determined by reference to the financial statement of Hondo of
the price it would pay for redemptions of its stock in the fiscal
year September 1, 1979, through August 31, 1980.7
The statutory notices of deficiency, on which this case is
based, were mailed to petitioner on September 20, 1994.
OPINION
Petitioner's primary argument is as follows: Elizabeth and
Birnie entered into a "business partnership" in which legal title
to all of the partnership's assets was held in Elizabeth's name;
following Elizabeth's death in 1979, Birnie failed to exercise
her statutory rights as surviving partner to wind up the affairs
of the business partnership and to distribute the assets of the
partnership to the estate of her sister and herself; and finally,
7 For purposes of this case, if we find that Birnie did
transfer the stock in question, the parties have stipulated the
fair market value of such stock was $2,000 per share at the time
of the transfer.
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