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are to the Internal Revenue Code in effect as of the date of the
decedent's death, and all Rule references are to the Tax Court
Rules of Practice and Procedure.
After concessions, the issues we must decide are as follows:
1. Whether, pursuant to section 2036(a)(1), the value of
certain assets transferred to family partnerships is includable
in the decedent's gross estate. We hold that it is.
2. Whether petitioner, pursuant to section 6662(a), is
liable for the accuracy-related penalty for negligence. We hold
it is not.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. At
the time of her death, on December 13, 1991, Dorothy Schauerhamer
(decedent) resided in Salt Lake City, Utah. At the time the
petition was filed, petitioner's personal representative had a
mailing address in Salt Lake City, Utah.
Decedent and her husband Willard Schauerhamer had three
adult children, David Schauerhamer, Diane Liddiard, and Sandra
Bradshaw, and jointly managed Economy Builders Supply, Inc., a
closely held corporation engaged in the sale of building
materials. After Willard's death in 1983, decedent took control
of the business. She also managed several rental properties.
In late November of 1990, decedent was diagnosed with colon
cancer. In early December of that year, she retained an
attorney, Travis Bowen, to set her business affairs in order.
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