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Our Valuation of the California Motel
At his death, decedent owned both a one-half undivided
interest in parcel 2 and 50 shares of C&L Bailey stock. C&L
Bailey, in turn, owned the other half of parcel 2, as well as the
motel that sat upon it. The estate, being initially unaware of
decedent’s individual ownership interest in parcel 2,
inadvertently omitted this asset from decedent’s gross estate on
the estate tax return. Petitioner now contends that this
inadvertent omission should be cured by increasing decedent’s
gross estate by $64,100, on the basis of Biles’ determination of
the date-of-death value of decedent’s ownership interest in
parcel 2. At the same time, petitioner contends, the value of
the 50 shares of C&L Bailey stock included in decedent’s gross
estate should be reduced from $370,708 (as reported on the estate
tax return) to $194,565, to reflect the “title problem” that
petitioner contends reduced the value of the California motel
from $1,388,000 (as indicated by the Ohrmund report, on which the
relevant values reported on the estate tax return were
predicated) to $819,000 (as determined by Biles).
We are unpersuaded by petitioner’s contentions. In the
first instance, Biles’ conclusion that decedent’s ownership
interest in parcel 2 should be valued at $64,100 appears based on
an erroneous assumption that decedent owned all of parcel 2. In
fact, decedent owned only a one-half undivided interest in parcel
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