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$250,000, $400,000, and $100,000, respectively. In January 1997,
SFLP increased John Strangi’s line of credit to $350,000 and
Albert T. Strangi’s line of credit to $650,000. In November
1997, SFLP advanced to decedent’s estate $2.32 million to post
bonds with the Internal Revenue Service and the State of Texas in
connection with the review of decedent’s estate tax return. In
1998, SFLP made distributions of $102,500 to each of the Strangi
children. The Strangi children had received $2,662,000 in
distributions from SFLP as of December 31, 1998.
Estate Tax Return
On January 16, 1996, decedent’s Form 706, United States
Estate (and Generation Skipping Transfer) Tax Return (estate tax
return), was filed by Mr. Gulig. On the estate tax return,
decedent’s gross estate was reported as $6,823,582. This
included a $6,560,730 fair market value for SFLP. For purposes
of the estate tax return, SFLP was valued by Appraisal
Technologies, Inc., on an “ongoing business”, “minority interest
basis”. The valuation report arrived at a value before discounts
and then applied minority interest discounts totaling 33 percent
for lack of marketability and lack of control.
The estate tax return also indicated that decedent had
$43,280 in personal debt and other allowable deductions totaling
$107,108, leaving a reported taxable estate of $6,673,194. The
estate tax return reported a transfer tax due of $2,522,088. The
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