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the amount of the "gift" determined under section 2512(a)
differs from the amount "deemed a gift" under section
2512(b).
Second, we agree with respondent's approach in these
cases under which respondent measured the difference
between the value of the 402.5 shares of voting stock that
the decedent transferred to the corporation and the value
of the 402.5 shares of nonvoting stock that he received in
return. See, e.g., Kincaid v. United States, 682 F.2d 1220
(5th Cir. 1982); Estate of Trenchard v. Commissioner, T.C.
Memo. 1995-121, T.C. Memo. 1995-232; Estate of Higgins v.
Commissioner, T.C. Memo. 1991-47. We agree with respondent
that pursuant to section 2512(b), the difference between
those values is deemed a gift.
The final issue is whether the voting common stock
that the decedent transferred to HBC should be valued as a
single block of 50 percent of the stock of the corporation
or as two blocks of 25 percent. As mentioned above, if the
decedent's voting stock is valued as a single block, then
the parties have stipulated that each share of stock was
worth $11,827 immediately before the recapitalization.
In that event, the difference between what the decedent
transferred to HBC and what he received in return is
$2,412, and the decedent's gifts to his sons will be valued
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