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In the statutory notice, respondent treated petitioner’s
intrafamily transfers as gifts valued at $9,309,593. Before
trial, the parties agreed to have an arbitration panel decide the
value of these interests at the time of transfer, without regard
to any encumbrances on the properties. The parties have called
upon this Court to decide whether (and, if so, by how much)
adverse claims of title would affect the panel’s appraisals of
value. The panel, made up of two partisan arbitrators who chose
a third neutral one, fixed the unencumbered values of these
interests at $1,455,914; i.e., the mineral leases transferred to
Mrs. Grynberg were $1,404,902, the overriding royalties assigned
to the children’s trusts were $50,412, and the overriding
royalties assigned to his wife were $600. Approximately 11
percent of the total value of mineral interests assigned was
subject to judgment liens or lis pendens.
OPINION
The Spousal Assignments
The first issue is whether any of the transfers to Mrs.
Grynberg were gifts giving rise to Federal gift taxes. We note
that the transfers took place before the advent of the unlimited
marital deduction under section 2523(a) (as amended and in effect
currently).4
4The Economic Recovery Tax Act of 1981, Pub. L. 97–34, sec.
403(b)(1), 95 Stat. 172, 301, broadened the gift tax marital
(continued...)
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