- 4 -
March, as executrix, was granted authority to sell 2,800 shares
of Savings stock at $335 per share and 500 shares of Willits
stock at $850 per share. March sold the shares in 1992 and paid
Federal and State of California estate taxes of $1,008,698 and
$200,632, respectively. March, as executrix and residuary
legatee, assumed individual liability for any estate taxes later
found due from petitioner.
Petitioner reported the capital gain from the sales of the
Savings and Willits shares on Schedule D of its 1992 Form 1041,
U.S. Fiduciary Income Tax Return, which it filed on or about
April 15, 1993. Petitioner calculated the gain by subtracting
the value of the shares reported on the estate tax return from
the amount received from their sale. Petitioner reported
$429,800 of gain from the sale of the Savings shares and $182,500
from the sale of the Willits shares.1 Petitioner, however, did
not pay any income tax on these gains; instead, it reported a net
long-term capital gain distribution of $610,274 to March on
Schedule K-1, Beneficiary's Share of Income, Deductions, Credits,
Etc., which it attached to the Form 1041.
March and her husband, Charles March, filed their 1992 Form
1040, U.S. Individual Income Tax Return, using the status of
1Petitioner also reported $6,955 of long-term capital gain
from the sale of 2,000 shares of PG&E stock and a $738 net long-
term capital loss carryover from 1991. The value of the PG&E
shares and the loss carryover are not at issue in this case.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011