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After concessions,1 the sole issue for decision is whether
decedent's transfers of stock in 1994 and 1995 to members of his
brother's family were, in substance, indirect gifts of stock to
members of his own family. We hold they were.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found,
unless otherwise noted. The stipulation of facts and the
accompanying exhibits are incorporated herein by this reference.
Decedent died testate on October 4, 1995, in Wahpeton, North
Dakota (Wahpeton). At the time the petition in this case was
filed, the personal representatives of the estate, Jay Schuler
and Thomas Schuler, resided in Wahpeton.
All section references are to the Internal Revenue Code in
effect for the date of decedent's death, and all Rule references
1In the notice of deficiency, respondent determined values
for certain real properties and a limited partnership interest
owned by decedent at the time of his death that decreased the
value of the gross estate. Respondent determined that the value
of the taxable estate should be increased for the amount claimed
as a charitable deduction which was in excess of the value of the
properties contributed to qualified charities, for the unreported
value of decedent's brokerage account, and for interest accrued
on certain indebtedness owed to decedent. The estate concedes
these adjustments.
The estate attached Schedule J to Form 706, United States
Estate (and Generation-Skipping Transfer) Tax Return, to claim
deductions for $35,000 of attorney's fees, $7,500 of accountant's
fees, and $4,400 of miscellaneous expenses. The parties have
stipulated that the estate will incur additional administrative
expenses which will further decrease the value of the taxable
estate.
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