Estate of James J. Renier, Deceased, Kent L. Renier and Dubuque Bank & Trust Company, Co-Executors - Page 6

                                        - 6 -                                         
          trend during this period is discernible, because for some time              
          prior to its fiscal year ended June 30, 1993, Renier                        
          overestimated its cost of goods sold as the result of an error in           
          its inventory accounting system and, consequently, underreported            
          its net income.  This error was addressed in 1996, at which time            
          Renier filed amended corporate income tax returns for 1993 and              
          1994, reporting increased taxable income for those years.  These            
          changes resulted in Renier’s having additional income tax                   
          liabilities totaling $137,038 for the period beginning July 1,              
          1992, and ending on the valuation date,2 which Renier paid in               
          1996.  Renier also revised its financial statements to reflect              
          the changes.  After the revisions, Renier had total pretax net              
          income from July 1, 1988 through the valuation date of $879,597,            
          and after-tax net income of $579,367.                                       
               Decedent became president of Renier in the 1960's and served           
          in that position until his death.  At his death, decedent owned             
          22,100 of the 25,000 outstanding shares of Renier’s common stock.           
          Renier’s shares have never been listed on any stock exchange or             
          available on any over-the-counter market and have never been                
          publicly traded or privately traded.                                        
               The co-executors hired Jules Steinberg to appraise Renier’s            
          shares for estate tax purposes.  Based on Mr. Steinberg’s                   

               2 Renier had increased tax liability for its 1993 fiscal               
          year of $108,495 and increased tax liability of $28,543, on a               
          prorated basis, for the first 9.33 months of Renier’s 1994 fiscal           
          year that occurred prior to the valuation date.                             

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