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decedent’s 50 shares of C&L Bailey stock was $357,738 (see
Appendix B).
B. Valuation of QTIP Property
As previously discussed, the parties agree that the value of
the 50 shares of C&L Bailey stock includable in decedent’s gross
estate pursuant to section 2044 and the value of the 50 shares of
C&L Bailey stock that decedent owned outright are identical.
Consequently, we hold that the 50 shares of C&L Bailey stock
includable in decedent’s gross estate pursuant to section 2044
have a value of $357,738.
C. Unreported Taxable Gifts
The Promissory Note
In 1993, decedent transferred certain of his separate
property, including the Lake Catherine property, into the grantor
trust. On January 31, 1994, the Manesses executed a $148,700
promissory note in favor of the grantor trust. A year later, on
January 31, 1995, after decedent had revoked the grantor trust,
decedent and Melba executed a warranty deed conveying the Lake
Catherine property to the Manesses. On the same date, decedent
and Melba executed an assignment of the promissory note to three
of decedent’s children.
Respondent contends that the assignment of the promissory
note gave rise in 1995 to taxable gifts from decedent to three of
his children in the full amount of the promissory note (less
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