-50-
$45,000. The parties stipulated that the coexecutors did not
report the Isfahan rug on the estate’s Federal estate tax return.
At trial, the Court granted the estate’s request to vacate that
stipulation. The estate had pointed to the fact that the
Lloyds’s receipts in evidence listed 10 rugs and that the
coexecutors included in the taxable estate the 10 rugs shown on
Butterfield’s appraisal. The estate alleged that the Isfahan rug
was reported by the coexecutors as the “Indian rug, 55 x 86
inches” with a value of $400. The Court informed the parties
that the issue of whether the coexecutors included the applicable
fair market value of the Isfahan rug in the taxable estate would
be decided on the basis of the record.
On the basis of the record, we conclude that the Isfahan rug
was not the referenced Indian rug. Isfahan (or Esfahan as it is
more commonly spelled) is a city in Iran. It is not a city in
India. We also conclude that the 10 rugs reported on the
estate’s Federal estate tax return did not represent the total
fair market value of the 10 rugs purchased from Lloyds on
December 5, 1988. As explained below, we find that the
coexecutors failed to include within the taxable estate $59,530
for rugs owned by the decedent when he died.
The December 5, 1988, receipts show that the decedent paid a
bulk price of $276,000 for 24 items (the 20 items shown in item
numbers 2 through 21 inclusive of five rugs shown in item number
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