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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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