Phil,Well, thanks for your advice. My inclination is the same as yours, to include the state gift tax in the basis adjustment because it seems like a reasonable thing to do. Maybe I'm just incredibly naive, but I always figure that if I do things in good faith and it turns out that maybe I interpreted things wrong, the worst that will happen is that I'll have to amend and maybe pay interest or a modest penalty. That is, I won't be clapped into jail for fraud. Lorenzo
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