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6251-00, and a Federal estate tax deficiency of $143,932 relating
to docket No. 6262-00. Unless otherwise indicated, all section
references are to the Internal Revenue Code as amended, and all
Rule references are to the Tax Court Rules of Practice and
Procedure. The issues are the valuation of certain retained and
gift interests in a Family Limited Partnership (FLP) and
liability for the section 6651(a) addition to tax.
FINDINGS OF FACT
When the petitions were filed, K. Robert Dailey II was a
resident of Harris County, Texas, where, in 1997, his mother,
Elma Middleton Dailey, had died, and Mr. Dailey had received an
appointment to be her executor. On December 2, 1982, Mrs.
Dailey’s husband died, leaving to her, among other things, the
following:
Number of Value per Total
Company Shares Share Value
Exxon Corp. 11,108 $33.63 $373,562
American Telephone
& Telegraph Co. (AT&T) 400 65.75 26,300
On October 20, 1992, Mrs. Dailey executed a will, a
Revocable Living Trust (Trust), and an Agreement of Limited
Partnership (Agreement) of Elma Middleton Dailey FLP. The will
provided that Mrs. Dailey’s residuary estate would pass to the
Trust, from which her son would receive the corpus outright.
Upon execution of the Agreement, Mrs. Dailey took a 1-
percent general and a 98-percent limited partnership interest,
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