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Amlie Family was part of the consideration for the 1995 FSA.35
Analyzing the 1995 FSA as whole, taking into consideration all
the facts and circumstances surrounding the making of that
agreement, we conclude that this payment was a transfer in the
ordinary course of business and not a gift. We accordingly do
not sustain respondent's determination that the payment resulted
in a $30,000 increase in decedent's adjusted taxable gifts.
V. Section 6662(a) Negligence Penalty
Respondent determined that the estate was liable for an
accuracy-related penalty under section 6662 with respect to the
portion of the underpayment of estate tax attributable to the
value reported for decedent's FABG stock. Because we have held
that the value of the FABG stock as reported by the estate is
correct, there is no underpayment attributable thereto.
Accordingly, we do not sustain respondent's determination with
respect to the section 6662 accuracy-related penalty.
VI. Conclusion
In reaching our holdings in this case, we have considered
all the remaining arguments made by the parties for results
contrary to those expressed herein. To the extent not discussed
35 Respondent argues that the conservator was under no legal
obligation to make this reimbursement to Rod. This is incorrect.
Under Iowa law, once the 1995 FSA was approved by the district
court, as a fiduciary of the ward, the conservator was bound to
take those actions required to effectuate the terms of that
agreement on her ward's behalf. Iowa Code sec. 633.71 (1992)
(court orders bind conservator).
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