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respondent issued to the estate a notice of deficiency, that
determined a Federal estate tax deficiency of $52,878,785. In
the notice of deficiency, respondent adjusted the values attached
by the estate to many assets in decedent’s gross estate. In
addition, respondent determined that the 5,134,629 shares of
Empak stock decedent transferred to WCB Holdings were includable
in decedent’s gross estate because decedent had retained sections
2035(a) and 2036(a) and/or (b) rights and interests in the
transferred property. On the estate tax return, the estate
reported values of the WCB Holdings class A units and BFLP
interest held by decedent at his death totaling $45,523,338.
Respondent in the notice of deficiency included in the gross
estate a value for decedent’s Empak shares that had been
transferred to WCB Holdings totaling $141,621,428.8 This
resulted in an adjustment increasing the gross estate by
$96,098,120.
Prior to trial, respondent amended the answer to seek an
increased deficiency based upon the parties’ agreement that the
starting price of Empak shares before any discounts was $32.24.
8This adjustment would include in the gross estate the value
of the Empak shares previously held by decedent and transferred
to WCB Holdings, including the Empak share value related to the
WCB Holdings class B membership units that were transferred to
BFLP.
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