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SFLP and $24,551 for his stock in Stranco. The total value of
the property held by SFLP as of the date of death was
$11,100,922, to which discounts were applied in calculating the
reported fair market value. The Form 706 also reflected other
assets of $238,301 (including household and personal items,
vehicles, securities, certain receivables, and bank account
balances totaling $762) and claimed deductions of $43,280 for
debts of decedent (including $5,161 for rents to SFLP) and
$107,108 for expenses.
In a statutory notice dated December 1, 1998, respondent
determined a deficiency in Federal estate tax of $2,545,826 and
an alternative deficiency in Federal gift tax of $1,629,947. The
estate tax deficiency resulted in large part from respondent’s
conclusion that decedent’s interest in SFLP should be increased
by $4,386,613 (to $10,947,343) and his interest in Stranco should
be increased by $29,009 (to $53,560).
The proceedings in Strangi I were initiated in response to
the foregoing notice of deficiency. Prior to trial, respondent
attempted by motion to raise section 2036 as an issue. Strangi I
at 486. That motion was denied as untimely. Id. With respect
to the remaining issues, we held in Strangi I at 486-493:
(1) The partnership was valid under State law and would be
recognized for estate tax purposes; (2) section 2703 did not
apply to the partnership agreement; (3) the transfer of assets to
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