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Mr. Williams, Peter G. Ogden, and petitioner-wife (Mrs.
Prokopov) served as co-executors of Mrs. Ogden's estate.4 At the
time of her death, Mrs. Ogden had not exercised her noncumulative
right to withdraw the greater of $5,000 or 5 percent of the value
of the trust's corpus. As of May 11, 1990, the date of Mrs.
Ogden's death, Oak Den had a fair market value of $600,000, and
the trust's corpus had a fair market value of $755,759.14. In
computing her estate tax liability, the executors of Mrs. Ogden's
estate included 5 percent of the fair market value of the trust's
corpus, as of May 11, 1990, in her gross estate.
In 1992, Oak Den was sold to Ryan's Family Steak House, Inc.
(RFSH) for $600,000. For purposes of calculating the trust's
gain on the sale of Oak Den, Mr. Williams determined that Oak Den
had an adjusted basis of $276,050.5 Expenses associated with
3(...continued)
* * * Upon the death of my wife, [], the
remaining principal or corpus of the said
trust shall be distributed as my wife shall
direct in her will by specifically referring
to and exercising the special power of
appointment in her last will and testament;
provided, however, that in no event may she
exercise this power in favor of herself, her
creditors, her estate, or the creditors of
her estate; provided further, however, that
this power shall be exercisable only in favor
of my lineal descendants or spouses of lineal
descendants. * * *
4Mrs. Prokopov is the daughter of Mr. and Mrs. Ogden.
5In deriving this figure, Mr. Williams first reduced Oak
Den's fair market value at the time of Mr. Ogden's death by 5
(continued...)
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