Estate of Lewis A. Bailey, Deceased, Frances Jeanette Foster, Executrix - Page 37




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          taxable gifts if we accept the $5,000 per-share value that                  
          respondent does not appear to dispute.  Moreover, we are                    
          unimpressed with respondent’s suggestion that the decrease in               
          decedent’s stockholdings can be explained only by supposing that            
          decedent gave the shares away.  In light of the previously noted            
          stipulation that C&L Bailey redeemed 100 shares of its stock from           
          1985 to 1993, it seems more plausible that C&L Bailey simply                
          redeemed some of decedent’s shares.                                         
               After due consideration of the limited evidence in the                 
          record, and bearing heavily against respondent, who has failed to           
          show any meaningful basis for his determination in the notice of            
          deficiency, we conclude and hold that respondent erred in                   
          determining that decedent had unreported taxable gifts of C&L               
          Bailey stock in 1989 and 1993.16                                            
          D.  Administrative Expenses                                                 
               Petitioner claims $47,522 of administrative expenses that              
          were not claimed on the estate tax return.  Respondent has                  
          conceded all these claimed administrative expenses except for               


               16 At trial, petitioner sought to raise new issues as to               
          whether decedent’s 1993 gift tax return erroneously reported a              
          $28,147 taxable gift to Frances Jeanette Foster and as to whether           
          decedent’s 1989 gift tax return overstated amounts of gifts to              
          Roger and Lillian Bailey.  We decline to consider these                     
          intrinsically factual issues raised for the first time at trial,            
          since they were not properly pleaded and resulted in surprise and           
          prejudice to respondent.  See Estate of Mandels v. Commissioner,            
          64 T.C. 61, 73 (1975); see also Rules 34(b)(4), 41(b).  In any              
          event, the evidence in the record does not credibly establish               
          petitioner’s entitlement to the relief sought.                              




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