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stock in the recapitalization of HBC, described above.
Respondent determined in the notice of deficiency and takes
the position in these proceedings that the decedent's
exchange of stock was a transfer of property for less than
adequate and full consideration in money or money's worth,
as described in section 2512(b). Unless stated otherwise,
section references concerning the estate tax are to the
Internal Revenue Code as in effect on the date of the
decedent's death, and section references concerning the
gift tax are to the Internal Revenue Code as in effect
during the years in issue. Consequently, respondent
determined in the notice of deficiency and argues here that
the amount by which the value of the decedent's voting
common stock exceeds the value of the nonvoting common
stock received in the recapitalization is a gift to the
decedent's two sons, the only persons who held voting stock
after the transaction. Respondent's methodology in the
notice is the same as respondent's position in these
proceedings, but the values differ. The following schedule
summarizes respondent's position in the notice of
deficiency and respondent's position at trial:
Notice of Position
Deficiency at Trial
Value of a share of voting common stock$18,927 1$11,827
before the recapitalization if held as
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