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return, leaving an unpaid balance in the assessed estate tax
liability of $1,299,465. The estate requested and received
extensions of time within which to pay estate tax under section
6161.2 After examination of the estate tax return, respondent
determined that the fair market value of decedent’s one-half
interest in the Busch property was $7,400,000, or $3,590,000
greater than the amount reported by the estate.
The Busch property was improved by three dwelling units and
farm equipment storage facilities. Decedent was born in 1894 and
resided on the property throughout his life. Decedent originally
coowned the property with his brother, but at the time of
decedent’s death, his coowner was a trust established by Velma
Busch (decedent’s sister-in-law) who was then 97 years old.
Velma Busch died during October 1996. Prior to his death,
decedent and his coowner(s) were generally not interested in
selling the property. Decedent left his one-half interest in the
Busch property to Mary and Eugene Dana, decedent’s niece and her
husband.
The Busch property was located in unincorporated Alameda
County, adjoining the city of Pleasanton. Historically, the
property had been used for agricultural purposes and was so zoned
by Alameda County. Alameda County had a 100-acre agricultural
2 All section references are to the Internal Revenue Code in
effect as of the date of decedent’s death, and all Rule
references are to the Tax Court Rules of Practice and Procedure,
unless otherwise indicated.
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Last modified: May 25, 2011