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calculating the overall estate tax or gift tax liability. We
believe that petitioners’ argument oversimplifies the issue; we
do not agree that petitioners would be entitled to an offset for
estate tax or gift tax purposes for the reasons set forth below.
First, petitioners reported on the 1993 and 1994 gift tax
returns and on the estate tax return that the fair market value
of every subject interest was the book value, as determined under
each company’s buy-sell agreement, at which the subject interest
was sold. See supra pp. 51-55. Reported values are considered
to be an admission by petitioners, so that lower values cannot be
substituted without cogent proof that the reported values were
erroneous. See, e.g., Estate of Hall v. Commissioner, 92 T.C.
312, 337-338 (1989). Here, petitioners did not provide evidence
of value contrary to book value with regard to transferred
interests in True Geothermal Energy, True Mining, and True
Environmental Remediating LLC as of January 1, 1993, and Clareton
Oil, Donkey Creek Oil, Pumpkin Buttes Oil, Sunlight Oil, and Wind
River Oil as of June 4 and June 30, 1994. Therefore, the record
does not contain sufficient evidence to determine the aggregate
fair market value of all the transferred interests.
Second, with respect to the gift tax, we have found no
authority that would allow petitioners to offset sales of some
companies for allegedly excess consideration (i.e., buy-sell
formula price exceeded fair market value) against unrelated sales
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