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C. Notice of Deficiency
Respondent issued a notice of deficiency determining a
$707,054 deficiency in Federal estate tax. In the notice of
deficiency, respondent increased the values of decedent’s interests
in the limited partnerships and increased the amount of taxable
gifts related to decedent’s lifetime gifts of partnership interests
in those partnerships.
Respondent determined that the value of decedent’s interest in
the Thompson Partnership was $1,396,152, rather than $837,691, and
the value of his interest in the Turner Partnership was $1,717,977,
rather than $875,811. As a result of those determinations,
respondent increased decedent’s taxable estate by $1,400,627.
Respondent also determined that the value of decedent’s 490
shares of Thompson Corp. was $13,977, rather than $7,888, and the
value of his 490 shares of Turner Corp. was $4,094, rather than
$5,190. As a result of those determinations, respondent increased
decedent’s taxable estate by $4,993.
Respondent’s notice of deficiency also proposed to increase
the prior taxable gifts from $19,324 to $166,167.
OPINION
As a general rule, section 2001(a) of the Internal Revenue
Code imposes a Federal tax “on the transfer of the taxable estate
of every decedent who is a citizen or resident of the United
States.” Section 2001(b) provides that the estate tax is based
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