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Based upon the Panel’s consideration of these factors, it
determined that an overall weighted discount of 37 percent was
appropriate. The value of the collection was subsequently
further discounted to $14,500,000 (i.e., a total discount of
approximately 60.42 percent). Accordingly, the IRS determined
that the value of the gallery was $21,630,543.
On or about January 27, 1994, Conrad and Carroll, as co-
executors of Sidney’s estate, agreed to the adjustments made by
the IRS with respect to the gallery and to the additional amount
of tax owed by Sidney’s estate by signing a Form 890, Waiver of
Restrictions on Assessment and Collection of Deficiency and
Acceptance of Overassessment--Estate, Gift, and Generation-
Skipping Transfer Tax. The examination of the Form 706 was
concluded on or about February 2, 1994, when the IRS sent to
Conrad and Carroll an Estate Tax Closing Letter. Under section
6501, the period of limitations for assessment against the Form
706 filed by Sidney’s estate expired on February 28, 1994, 3
years after the Form 706 was filed.
Reporting the Gallery’s Operations From 1990 Through 1997
Conrad and Carroll operated the gallery through the trust
until November 8, 1995. As of November 8, 1995, the trust was
terminated and its assets (including the gallery) were
distributed to Conrad and Carroll in equal shares. Subsequently,
Conrad and Carroll contributed their interests in the gallery to
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