Estate of Mary D. Maggos - Page 6




                                        - 6 -                                         
          on a complete valuation of the business that Shircliff &                    
          Associates had conducted in 1983 and on the recent draft                    
          financial information that had been provided.  Shircliff &                  
          Associates formed the view that the business as a whole could be            
          sold for between $9,764,144 and $13,169,366.5                               
          Pleadings                                                                   
               The initial petition alleges in relevant part:                         
               The Commissioner erred by determining that the common                  
               stock of Pepsi-Cola Alton Bottling, Inc. owned by the                  
               Petitioner had a fair market value of $8,056,000.00 as                 
               of May 1, 1987.  [Emphasis added.]                                     
               Petitioner’s amended petition alleges:                                 
                    4.  The determination of gift tax set forth in the                
               Notice of Deficiency is based of the following errors:                 
                         (a)  The Respondent erred by determining that                
               a deficiency in gift tax of $2,229,350 is due from the                 
               Petitioner for the year ended December 31, 1987.                       
                         (b)  The Respondent erred by determining an                  
               increase of $5,056,000 in taxable gifts.                               
                         (c)  The Respondent erred by determining that                
               the total amount of taxable gifts is $5,057,000.                       
                         (d)  The Respondent erred by determining the                 
               tax on total taxable gifts is $2,422,150.                              
                         (e)  The Respondent erred by determining that                
               the redemption of the Petitioner’s stock of Pepsi-Cola                 
               Alton Bottling, Inc. (“PCAB”) was a gift since the                     
               redemption was fraudulently induced and resulted in                    
               Petitioner being swindled out of the full value of her                 
               PCAB stock.                                                            
                         (f)  The Respondent erred by determining that                
               the redemption of the Petitioner’s PCAB stock was a                    
               gift since the redemption constituted a bona fide,                     
               arms-length transaction which proved to be a bad                       
               bargain for the Petitioner.                                            


               5This was based on a range of values between $5.19 and $7              
          per case times 1,881,338 cases sold.  The valuation worksheet               
          also shows a total valuation of $10,061,000.                                





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