Estate of Elma Middleton Dailey, Deceased, Donor, K. Robert Dailey, II, Executor - Page 2




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          administrative costs pursuant to section 7430 and Rule 231.1                
          This Court ruled in favor of petitioners, in Dailey v.                      
          Commissioner, T.C. Memo. 2001-263, and we incorporate herein by             
          reference the facts set forth in that opinion.                              
                                     Background                                       
               On October 20, 1992, Elma Middleton Dailey executed a will,            
          a Revocable Living Trust (trust), and an Agreement of Limited               
          Partnership (agreement) of Elma Middleton Dailey Family Limited             
          Partnership (FLP).  On November 13, 1992, Mrs. Dailey contributed           
          publicly traded stock to the FLP, and on December 8, 1992, she              
          gave limited partnership interests in the FLP to her son, her               
          son’s wife, and the trust.                                                  
               By notices dated March 15, 2000, respondent determined                 
          Federal gift and estate tax deficiencies relating to the                    
          valuation of the FLP interests.  At trial, the Court upheld                 
          petitioners’ discounts and held that there were no deficiencies.            
               On December 4, 2001, petitioners filed their motion for                
          allowance of claims for litigation and administrative costs.  On            
          March 4, 2002, respondent filed an objection to motion for                  
          litigation costs and memorandum of points and authorities in                
          support of respondent’s objection to the motion for litigation              
          costs.  Petitioners then filed an affidavit on June 19, 2002.               


               1  Unless otherwise indicated, all section references are to           
          the Internal Revenue Code in effect at relevant times, and all              
          Rule references are to the Tax Court Rules of Practice and                  
          Procedure.                                                                  




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