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shares of common stock for 3,000 shares of Preferred Stock (the
Recapitalization).
While the Recapitalization indirectly addressed BKC's
requirement that each common shareholder personally guarantee the
debt of FIC, the Recapitalization had not been required by any
condition imposed by BKC.
As of September 30, 1981, the book value of FIC's common
stock was $1,109,400. Decedents did not file any 1981 gift tax
returns reporting any donative transfers that they may have made
by reason of their participation in the Recapitalization.
After the Recapitalization, decedents executed new wills
devising their shares of Preferred Stock to their children other
than Robert.4 As of the date of trial, all the Preferred Stock
has remained outstanding, all dividends on the Preferred Stock
have been timely declared and paid, and Robert has been the only
shareholder to personally guarantee the debts of FIC.
F. Estate Tax Returns
Royal died on June 29, 1990, and Maude died on June 12,
1992. Robert, as personal representative, executed and timely
filed the required estate tax returns. The adjusted taxable
gifts reported on line 4 of the estate tax returns for Royal's
4 In a distinction dating from the 19th century, a testator
devises real property to a devisee and bequeaths personal
property to a legatee. Dukeminier, Wills, Trusts, and Estates 36
(1984). However, the Florida Probate Code uses the term "devise"
to describe the transfer at death of personal property as well as
real property. Fla. Stat. Ann. sec. 731.201(8) (West 1995).
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