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estate tax return, listed the interests in the True companies
that Dave True originally conveyed to the living trust at its
inception. The estate tax return made no further disclosure of
the valuation of the True companies under the buy-sell
agreements.
On brief, petitioners explained that the book value of Dave
True’s interests in the True companies was reported as a cash
asset of the living trust because, under the terms of the buy-
sell agreements, the sales were deemed to have been transacted as
of the day before Dave True’s death, or June 3, 1994.
Petitioners hired Mr. Lax to value Dave True’s interests in
the True companies before filing the estate tax return.
Petitioners instructed Mr. Lax to disregard the buy-sell
agreements in so doing. For the most part, Mr. Lax’s values for
the disputed companies approximated book value. However, book
values for the subject interests in Belle Fourche and Black Hills
Trucking were only 18.20 and 29.92 percent, respectively, of Mr.
Lax’s values. In any event, petitioners did not use any of Mr.
Lax’s values, but instead in effect reported the interests at
book value.
On an attachment to her amended 1994 gift tax return,94 filed
on or around June 19, 1996, Jean True disclosed the sale to her
94Jean True’s 1994 gift tax return as originally filed did
not disclose the sales of her remaining interests in the True
companies.
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