Estate of Pauline Welch, Deceased, Newton G. Welch, Jr. and Lois Welch McGowan, Co-Executors - Page 2

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          section references are to the Internal Revenue Code in effect as            
          of the date of the decedent's death.  Rule references are to the            
          Tax Court Rules of Practice and Procedure.  The term                        
          "coexecutors" refers to the estate's coexecutors, Newton G.                 
          Welch, Jr. (Newton) and Lois Welch McGowan.                                 
                                     Background                                       
               This case was submitted fully stipulated under Rule 122.               
          The stipulation of facts and the exhibits submitted therewith are           
          incorporated herein by this reference.  When the petition was               
          filed, the coexecutors resided in Nashville, Tennessee.                     
               Pauline Welch (decedent) died on March 18, 1993.  At the               
          time of her death, decedent was a minority shareholder in two               
          closely held corporations, Electric Services, Inc. (ESI) and                
          Industrial Sales Co., Inc. (ISC).  On the date of decedent's                
          death, ESI had 570 shares issued and outstanding (110 voting                
          common shares/460 nonvoting common shares) of which decedent                
          owned 259 nonvoting common shares; ISC had 836 shares issued and            
          outstanding (150 voting common shares/686 nonvoting common                  
          shares) of which decedent owned 259 nonvoting common shares.  The           
          coexecutors, decedent's son and daughter, equally inherited                 
          decedent's property, including the common nonvoting shares of ESI           
          and ISC.                                                                    
               The remaining shares of both corporations, voting and                  
          nonvoting common, were held in a trust established under the will           





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