Estate of Mario E. Bosca, Deceased, Marie A. Baker Formerly Marie A. Bosca, Executor - Page 17

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             Respondent further determined that the decedent's total                  
             amount of taxable gifts as of the end of 1990 amounted to                
             $2,491,175, of which the gifts made in connection with the               
             recapitalization are the principal component.                            
                  Among other adjustments made in the notice of estate                
             tax deficiency issued to the decedent's estate, respondent               
             determined that the adjusted taxable gifts reported on the               
             decedent's estate tax return, $527,217, should be increased              
             to reflect the gifts determined in the notice of gift tax                
             deficiency, including the gifts made to the decedent's two               
             sons in connection with the recapitalization.  The notice                
             of deficiency describes this adjustment in the following                 
             terms:                                                                   

                       The amount of $527,217.00 shown on the                         
                  estate tax return as adjusted taxable gifts                         
                  is increased $1,963,958.00 as a result of the                       
                  increase in the amount of adjusted taxable gifts                    
                  made by the decedent during the years in 1988,                      
                  1989 and 1990.  Accordingly, it is determined                       
                  that the amount of adjusted taxable gifts added                     
                  to the taxable estate is $2,491,175.00.                             

                                      OPINION                                         
                  In the gift and estate tax returns that are the                     
             subject of these consolidated cases, the decedent's estate               
             took the position that no gifts were made by the decedent                
             when he exchanged voting common stock for nonvoting common               





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