Estate of Concetta H. Rector, Deceased, John M. Rector, II, Co-Executor and Co-Trustee - Page 14




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          adjustments to tax resulting from omissions on the estate’s                 
          Federal estate tax return.                                                  
          10. 1991 and 1999 Cash Gifts                                                
               In 1991, decedent’s attorney recommended that decedent make            
          gifts to John Rector and Frederic Rector during the year in the             
          total amount of $595,000.  Decedent followed this recommendation,           
          and she informed John Rector that she had made those gifts.  On             
          January 6, 1999, decedent made separate cash gifts of $35,000 to            
          John Rector and Frederic Rector.                                            
          11. Federal Gift Tax Returns                                                
               Decedent filed a 1991 Federal gift tax return on October 30,           
          1992, reporting $595,000 in gifts to John Rector and Frederic               
          Rector.  The return was prepared by an accountant in Nevada                 
          County, California.                                                         
               Decedent filed a 1999 Federal gift tax return on April 15,             
          2000, reporting gifts of 11.11-percent limited partner interests            
          to each of her sons.  This return did not report decedent’s                 
          $35,000 cash gifts to her sons.                                             
          12. Value of RLP Assets                                                     
               The estate elected to value decedent’s gross estate as of              
          the alternate valuation date.  On that date, the value of the               
          assets owned by RLP was $8,126,579.                                         







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