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Property Received
In return for her 567 shares of PCAB, decedent received a $3
million promissory note from PCAB. Respondent determined that
the promissory note had a value of $3 million. The value of the
promissory note is uncontested.
Conclusion
Pursuant to the stock redemption on May 1, 1987, decedent
transferred 567 shares of PCAB stock having a fair market value
of $4.9 million and received property worth $3 million. As a
result of this redemption, Nikita Maggos became the sole
shareholder of PCAB. The value received by Nikita Maggos as a
result of the redemption of 567 PCAB shares on May 1, 1987, was
$1.9 million. Decedent made a taxable gift of $1.9 million to
her son Nikita Maggos when PCAB redeemed her interest in the
company.
Decision will be entered
under Rule 155.
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