Estate of Mary D. Maggos - Page 13

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          the alleged difference between the fair market value of                     
          decedent’s stock and the redemption price.                                  
               Section 2501(a) provides for a tax on gifts by individuals.            
          Section 2512(a) provides that the value of a gift of property at            
          the date of the gift shall be considered the amount of the gift.            
          Section 2512(b) provides:                                                   
                    SEC. 2512(b).  Where property is transferred for                  
               less than an adequate and full consideration in money                  
               or money’s worth, then the amount by which the value of                
               the property exceeded the value of the consideration                   
               shall be deemed a gift, and shall be included in                       
               computing the amount of gifts made during the calendar                 
               If the value of the property given up by decedent exceeded             
          the value of the property she received, decedent made a gift for            
          the purposes of the Federal gift tax.  The amount of any such               
          excess augmented the value of Nikita Maggos’ common stock in PCAB           
          and would be a taxable gift from decedent to Nikita.  See Kincaid           
          v. United States, 682 F.2d 1220, 1224 (5th Cir. 1982); Tilton v.            
          Commissioner, 88 T.C. 590 (1987); sec. 25.2511-1(h)(1), Gift Tax            

               8Sec. 25.2511-1(h)(1), Gift Tax Regs., provides:                       
               (h) The following are examples of transactions                         
               resulting in taxable gifts and in each case it is                      
               assumed that the transfers were not made for an                        
               adequate and full consideration in money or money’s                    
                    (1) A transfer of property by a corporation to B                  
               is a gift to B from the stockholders of the                            

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