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True, and David L. True at book value effective June 3, 1994.
The sales were effected by a closing that occurred on or about
September 20, 1994.
On March 3, 1995, the estate timely filed a Federal estate
tax return (estate tax return) reflecting, inter alia, the cash
proceeds received from the sale of the True companies under the
heading “H.A. True, Jr. Irrevocable [sic] Trust”.
On January 20, 1998, respondent issued the estate a notice
of deficiency (estate tax notice) determining that the underlying
values of the True companies that were reported on the estate tax
return were higher than book value. However, since issuing the
estate tax notice, respondent has conceded the reported values of
Dave True’s interests in Rancho Verdad, True Drilling,
Toolpushers Supply Co., Midland Financial Corp., Smokey Oil Co.,
Inc., and Roughrider Pipeline Co. that were sold by the estate in
1994. Appendix schedule 2, infra, lists Dave True’s interests
and compares the estate tax notice values to amounts paid by the
purchasers. In addition, respondent has stipulated that the
estate would be entitled to an increased marital deduction under
section 2056 if the value of interests in the True companies that
were sold to Jean True was determined to be greater than the
purchase prices under the buy-sell agreements.
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