Estate of Charles E. Reichardt - Page 10




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          G.   Tax Returns                                                            
               The partnership filed income tax returns (Forms 1065, U.S.             
          Partnership Return of Income) for 1993, 1994, 1995, 1996, and               
          1997.  The trust filed income tax returns (Form 1041, U.S.                  
          Fiduciary Income Tax Return) for 1994, 1995, 1996, and 1997.                
               In March 1994, decedent and his children, as executors,                
          filed a Federal estate tax return for Mrs. Reichardt's estate in            
          which they reported a gross estate of $1,092,290.  Hannah                   
          prepared the return.                                                        
               Decedent filed a Federal gift tax return for 1993 on April             
          15, 1994.  In it, he reported that he had given a 30.4-percent              
          interest in the partnership to each of his two children and that            
          each gift had a value of $310,000 as of October 22, 1993.                   
               After decedent died, petitioner obtained an appraisal of               
          decedent’s estate and the 1993 gifts.  On Schedule F of the                 
          estate tax return, petitioner reported that, when decedent died,            
          his gross estate included a 36.46-percent limited partnership               
          interest in the partnership which had a fair market value of                
          $346,000, and a 1-percent general partnership interest in the               
          partnership which had a fair market value of $13,000.                       
                                       OPINION                                        
          A.   Section 2036(a)                                                        
               A decedent’s gross estate includes the value of property               
          interests transferred by the decedent during his or her lifetime            






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