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tax return reporting an $11,000 gift that she made to her
daughter, Catherine Maggos Adkins. After taking into account the
$10,000 exclusion that applied to this gift, respondent
determined that Ms. Maggos' taxable gifts in 1987 totaled
$5,057,000, rather than the $1,000 amount shown on her 1987
return. Respondent increased Ms. Maggos' taxable gifts by
$5,056,000 to reflect this determination.
Ms. Maggos alleged in her petition that the value of her
redeemed stock was not more than $3 million, and that the value
of the promissory note was $3 million. On October 5, 1995, with
leave of the Court, Ms. Maggos amended her petition to allege new
facts. According to the amended petition, Ms. Maggos' stock was
worth substantially more than $3 million at the time of the
redemption, but Nikita Maggos and certain other persons who were
close confidants of Ms. Maggos fraudulently induced her to sell
her stock to PCAB for less than its full worth. Ms. Maggos
alleges in her amended petition that she did not make a gift to
Nikita Maggos because of this fraudulent inducement. Ms. Maggos
alleges alternatively in her amended petition that her sale of
the stock to PCAB was not a gift because the redemption was a
"bona fide, arm's length transaction which proved to be a bad
bargain" for her.
Ms. Maggos was born in 1906. She and her former husband,
Gust Maggos, developed PCAB over the course of several decades.
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Last modified: May 25, 2011