Estate of John L. Baird - Page 4




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               O.E. Williams has continually managed the trust properties             
          since the 1970s, and it was expected that he would continue to do           
          so.  O.E. Williams generally did not consult with his cotrustees            
          and/or family members in the management of the trust timberland.            
          His independent management was not necessarily in accord with the           
          best management practices.                                                  
               Reported in John’s estate was his undivided one-half                   
          community property interest in the 14/65 interest in the trust at           
          a value of $707,972, after applying a 25-percent                            
          fractionalization discount.  In an amended return for John’s                
          estate, a refund was claimed on the basis of an increased                   
          fractionalization discount of 50 percent.  Ultimately, a 60-                
          percent discount was claimed by John’s estate.  The 14/65                   
          interest after applying a 50-percent discount was returned at               
          $550,378.  After applying a 60-percent discount the reported                
          amount would have been reduced to $504,610.37.                              
               Sarah’s 17/65 interest was reported in her estate’s tax                
          return at a value of $665,686, after applying a 50-percent                  
          fractionalization discount.  In an amended return for Sarah’s               
          estate, a refund was claimed on the basis of a 60-percent                   
          increased fractionalization discount, which resulted in a                   
          reported value of $449,456.27.                                              
               Respondent determined that John’s 14/65 interest had a date            
          of death fair market value of $975,091.  Respondent determined              






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Last modified: May 25, 2011