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dispute that the value of the residence for estate tax purposes
was $400,000.
In determining the estate tax deficiency, respondent took
account of the transfer in determining adjusted taxable gifts for
purposes of determining the tentative tax computed pursuant to
section 2001(b)(1).3 Respondent determined that the residence
was worth $150,000 at the time of the transfer and determined a
gift of $75,000, equal to one-half the value of the residence.
Respondent now believes that the gift computation is erroneous.
Respondent further believes that the residence should not be
3 Sec. 2001(b) provides:
Computation of Tax.--The tax imposed by this section
shall be the amount equal to the excess (if any) of--
(1) a tentative tax computed under subsection (c)
on the sum of--
(A) the amount of the taxable estate, and
(B) the amount of the adjusted taxable
gifts, over
(2) the aggregate amount of tax which would have
been payable under chapter 12 with respect to gifts
made by the decedent after December 31, 1976, if the
provisions of subsection (c) (as in effect at the
decedent’s death) had been applicable at the time of
such gifts.
For purposes of paragraph (1)(B), the term “adjusted
taxable gifts” means the total amount of the taxable
gifts (within the meaning of section 2503) made by the
decedent after December 31, 1976, other than gifts
which are includible in the gross estate of the
decedent.
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