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$2,091,750 reported as its fair market value on the estate’s tax
return. The sole issue for our consideration is the fair market
value of Harlee International, Inc., on October 23, 1995, the
date of decedent’s death.
FINDINGS OF FACT1
Decedent Natalie Leichter was a resident of Los Angeles,
California, at the time of her death on October 23, 1995.
Decedent’s spouse, Harvey A. Leichter, died approximately 3
months earlier during July 1995. Decedent died testate and was
survived by two sons, Jeffrey L. Leichter and Steven F. Leichter.
Steven Leichter resided in Walnut, California, at the time the
estate’s petition was filed. Among other things, the estate
included all of the outstanding common stock of Harlee
International, Inc. (Harlee).
At the time of decedent’s death, Harlee was a California
corporation which had elected S corporation status for Federal
tax purposes. Harlee had 20,000 shares outstanding and was a
wholesale distributor of futon frames. Harlee was founded in
1981 by Harvey Leichter. It began as a small importer and
distributor of industrial fasteners imported from Asia.
Initially, Harlee operated out of the Leichter residence. In the
mid-1980s, Harlee entered into the business of the wholesale
1 The parties’ stipulations of facts are incorporated herein
by this reference.
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