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Estate Taxes
Decedent’s Estate Tax Return
As previously noted, decedent died in 1993. On Form 706,
United States Estate (and Generation-Skipping Transfer) Tax
Return, the estate reported no estate tax liability. The estate
excluded from the gross estate the $4,680,284 of gift taxes that
decedent and the trust had paid on the gifts of National Fruit
stock that decedent had made during the 3 years before his death.
Respondent’s Determination
In the notice of deficiency issued October 20, 1997,
respondent determined a $2,350,071 deficiency in the estate’s
taxes.3 In arriving at this determination, respondent increased
3 In January 1998, respondent issued separate notices of
transferee liability to each of the donee children. These
notices stated that, as transferees of property (i.e., the 1991
and 1992 gifts of National Fruit Product Co., Inc. (National
Fruit) stock), the donee children were each personally liable
under sec. 6324(c) for decedent’s unpaid Federal estate taxes to
the extent of the value of property received. The donee children
challenged the notices of transferee liability in petitions filed
in this Court (assigned docket Nos. 7267-98, 7269-98, 7270-98,
and 7274-98). In their consolidated cases in this Court, the
donee children moved for partial summary judgment, asserting that
they were not liable as transferees as a matter of law. In
Armstrong v. Commissioner, 114 T.C. 94, 100-102 (2000), this
Court denied the donee children’s motions for partial summary
judgment, concluding that under sec. 2035(d)(3)(C) the value of
the stock that decedent transferred to them was included in his
gross estate for purposes of sec. 6324(a)(2) and that,
consequently, the donee children were liable as transferees for
the estate tax deficiency due from decedent’s estate. In their
consolidated cases in this Court, the donee children continue to
contest the amount of estate tax deficiency due from the estate
and the amount of their personal liability.
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Last modified: May 25, 2011