Irene Eisenberg - Page 3

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          treated as a subchapter S corporation.  Subsequently, on January            
          1, 1989, the corporation's S election was revoked.  During the              
          years at issue, the corporation was a subchapter C corporation              
          for Federal tax purposes.                                                   
               The principal asset of the corporation, other than cash, was           
          a building in Brooklyn, New York (the property), which was leased           
          to third parties.  The corporation received income from the rents           
          generated from the lease appurtenant to the property during the             
          years at issue.  Prior to and during the years at issue, the                
          corporation's only income was from the active trade or business             
          of renting the property.                                                    
               On December 23, 1991, the first transfer date, petitioner              
          made gifts of 668 shares of stock in the corporation as follows:            
          (1) 334 shares to her son, Joseph Eisenberg; (2) 167 shares to              
          her granddaughter, Joanne B. Bayer; and (3) 167 shares to her               
          grandson, David Blum.  Subsequently, on September 30, 1992, the             
          second transfer date, and on February 23, 1993, the third                   
          transfer date, petitioner gave as gifts 275 shares and 57 shares            
          of stock in the corporation, respectively, to her son Joseph                
               The fair market value of the stock, after a 25-percent                 
          minority discount, was $517.20 per share on the first transfer              
          date, $356.71 per share on the second transfer date, and $341.77            
          per share on the third transfer date.                                       

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