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$527,217, does not include any amount attributable to the
decedent's participation in the recapitalization. Schedule
B, Stock and Bonds, of the estate tax return reports that
the decedent owned 695 shares of HBC nonvoting common stock
when he died and that the value of the stock was $7,575,500
or $10,900 per share.
Among other adjustments made in the notice of gift
tax deficiency issued to the decedent's estate, respondent
determined that the decedent made gifts to his two sons
in connection with the recapitalization. Respondent
determined that the aggregate amount of the gifts was
equal to the difference between what the decedent gave up,
$7,618,117.50 (i.e., 402.5 shares of voting common stock
x $18,927 per share), and what he received in return,
$5,859,997.50 (i.e., 402.5 shares of class B nonvoting
common stock x $14,559 per share). Thus, respondent
determined that the decedent made gifts to his two sons
in the aggregate amount of $1,758,120. The notice of gift
tax deficiency describes this adjustment as follows:
It is further determined that the donor
transferred 402.5 shares of the voting
common stock of the Hugo Bosca Company
to Christopher Bosca and Anthony Bosca
in exchange for the same number of non-
voting shares of Hugo Bosca Company
stock resulting in a gift of
$1,758,120.00 to Christopher Bosca and
Anthony Bosca.
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