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concessions by the parties, the issues for decision are:
(1) Whether an entity entitled “The Lea K. Hillgren Partnership,
A California Limited Partnership” (LKHP or partnership) is a
partnership that should be disregarded under section 2036(a) in
valuing seven properties in which decedent had an interest;
(2) the effect of a Business Loan Agreement (BLA) between
decedent and her brother on the value of four properties in which
decedent had an interest. Respondent concedes that the estate is
not liable for the accuracy-related penalty under section 6662.
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect as of the date of decedent’s
death, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
FINDINGS OF FACT
Some of the facts have been stipulated, and the stipulated
facts are incorporated in our findings by this reference. Lea K.
Hillgren (decedent) was a resident of California at the time of
her death. The executor of decedent’s estate, her brother, Mark
Hillgren (Hillgren), resided in California when the petition in
this case was filed.
Decedent’s Background
Decedent graduated from California State University with a
degree in restaurant and hotel management. She was a restaurant
manager for Hamburger Hamlet, attended cooking school in France,
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