Jewell E. Gray, Donor, Deceased and Estate of Jewell E. Gray, Deceased, Jewell Mae Detjen, Personal Representative, et al. - Page 2

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                       MEMORANDUM FINDINGS OF FACT AND OPINION                        

               COLVIN, Judge:  Respondent determined a deficiency in                  
          petitioner's estate tax of $1,179,865.2                                     
               After concessions, we must decide the following issues:                
               1.   Whether transfers totaling $1,724,198 from Beth W.                
          Corp. to or on behalf of decedent are loans.  We hold that the              
          transfers are not loans and that petitioner may not deduct the              
          transfers as a claim against the estate.                                    
               2.   whether the value of the stock of Beth W. Corp. should            
          be discounted because Beth W. Corp. will be liable for tax on a             
          capital gain when and if it is paid for real property it sold to            
          trusts established by decedent.  We hold that the value of the              
          stock should not be discounted.                                             
               3.   whether the appropriate discount for lack of                      
          marketability for the stock of Beth W. Corp. is 40 percent, as              
          petitioner contends; zero, as respondent contends; or some other            
          amount.  We apply a 15-percent discount for lack of                         
               Section references are to the Internal Revenue Code as in              
          effect on the date of death of Jewell E. Gray (decedent).  Rule             
          references are to the Tax Court Rules of Practice and Procedure.            

               2Respondent concedes all of the issues in docket Nos. 18526-           
          93 (gift tax and generation skipping tax) and 18537-93                      
          (generation skipping tax).                                                  

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