Estate of Concetta H. Rector, Deceased, John M. Rector, II, Co-Executor and Co-Trustee - Page 15




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          13. Federal Estate Tax Return                                               
               The estate timely filed a Federal estate tax return on                 
          October 16, 2002.  The return failed to report the 1991 and 1999            
          gifts of $595,000 and $70,000, respectively.  The return was                
          prepared by Anderson and signed by John Rector as coexecutor of             
          decedent’s estate.  The Federal estate tax return reported that             
          decedent’s gross estate on the applicable valuation date                    
          consisted of a single asset; namely, her interest in the 1991               
          revocable trust.  The return elected the alternate valuation date           
          of July 11, 2002, as the applicable valuation date.  The return             
          reported that the fair market value of the 1991 revocable trust             
          as of the applicable valuation date was $4,757,325, calculated as           
          follows:                                                                    
               Net asset value (NAV) of RLP            $8,126,579                     
               Decedent’s interest in RLP                    72.272%                  
               Decedent’s proportionate share of NAV      5,873,241                   
               Less 19 percent for lack of control                                    
          and lack of marketability                1,115,916                          
               Discounted value of decedent’s interest    4,757,325                   
                                       OPINION                                        
          1.  Preface                                                                 
               The value of an interest in property is included in a                  
          decedent’s gross estate if:  (1) The decedent made an inter vivos           
          transfer of the property; (2) the transfer was for less than                
          adequate and full consideration; and (3) the decedent retained              







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