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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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