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shares were reported as having a fair market value of $1,941,000.
The reduced value was based on a revised appraisal prepared by
Michael A. Dorman, which was attached to the amended Form 706.
On May 26, 1998, a Form 709, United States Gift (and
Generation-Skipping Transfer) Tax Return, was filed for
decedent’s tax year ended December 31, 1997. In that return,
$607,040 of taxable gifts was reported. Respondent issued a May
8, 2001, notice of gift tax deficiency, determining that the fair
market values of decedent’s gifts of interests in the Deputy FLP
should be increased as follows:
Date of Gift Value Reported Value Determined
May 31, 1997 $79,620 $127,680
July 20, 1997 481,350 843,804
July 20, 1997 62,020 74,515
Similar to the amendment of the estate tax return (Form 706), on
May 21, 2001, an amended Form 709 was filed for decedent’s tax
year ended December 31, 1997. In that return, $570,570 of
taxable gifts was reported. The reduction in the amount of gifts
reported for the 1997 year was attributable to the revised
appraisal reducing the value assigned to the interest in Godfrey.
OPINION
The controversy in these cases concerns the fair market
value of an interest in a closely held family corporation that,
in turn, is held by the same family’s limited partnership.
Because the largest asset of the partnership is an interest in a
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