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28, 1995, was $1,746,000, as respondent determined, or $920,800,
as the estate contends. We hold that it was $1,161,705.
Unless otherwise specified, section references are to the
Internal Revenue Code as amended and in effect on the date of
decedent’s death, and Rule references are to the Tax Court Rules
of Practice and Procedure.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
A. Decedent and the Executor
Decedent, who lived in Asheville, North Carolina, died
testate on September 28, 1995. When he died, he owned 178 shares
of WSA voting common stock, which was 61.59 percent of its
outstanding stock. Voting common stock was WSA’s only
outstanding stock when decedent died.
George W. Saenger, the executor of decedent’s estate, lived
in Asheville, North Carolina, when the petition was filed.
B. Waddell Sluder Adams & Co., Inc.
1. Insurance Business
WSA has been an S corporation since the early 1970s. It has
two components, a retail insurance agency and a managing general
insurance agency (MGA). In 1995, the retail agency generated 5
percent of WSA’s revenue, and the MGA generated 95 percent. The
retail agency sells insurance to the public.
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