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marital deduction ultimately allowed to Garry's estate, was
$2,154,781.
As filed with respondent, petitioner's estate tax return
reported a gross estate of $1,107,141, a taxable estate of
$272,756, and adjusted taxable gifts of $313.
Garry's will left the residue of his estate to the children.
His will specifically provided that all Garry's debts and
expenses of estate administration and all inheritance and other
transfer taxes were to be paid from the residuary estate, without
apportionment.
Garry's estate ultimately paid respondent and the State of
Indiana a total of over $1 million on account of estate and
inheritance taxes. The parties agree that pursuant to Garry's
will these taxes (and all administration expenses) were the
obligation of the children, to be paid out of their shares of the
estate.
During the 14-year period between Garry's death and
decedent's death (i.e., from 1979 to 1993) Garry's estate was
neither wound up nor terminated. Instead, it was administered as
an unsupervised estate; decedent was the personal representative.
Garry's estate therefore continued to hold substantial assets and
to receive substantial amounts of income during this period.
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