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Teresa received a check for $1,700,000 upon signing and
surrendering her note.
At or about the time of the settlement of the lawsuit,
Northgate Forest Development Corp. executed and delivered a
warranty deed conveying two lots in the Northgate Forest
subdivision to Tracy and a second warranty deed conveying another
two lots to Teresa.
OPINION
I. Deficiencies
A. Introduction
Respondent has determined inconsistent deficiencies in
income tax against both the Parkers and the daughters. She asks
the Court to determine who, as between the Parkers and the
daughters, is properly taxable with respect to the proceeds of
certain notes (the $2 million notes). There is no question that
the proceeds of the $2 million notes ended up in the hands of the
daughters, and that that happened as a result of certain gifts
made to them by Parker. We must, however, determine when those
gifts occurred. Put another way, we must determine who, as
between Parker and the daughters, owned the $2 million notes for
Federal income tax purposes at the time the notes were paid.
The Parkers argue that Parker made gifts to the daughters
either (1) before or at the time that the joint venture was
created in 1980 or (2) when the Bradish group interest in the
joint venture was sold in 1981, and the $2 million notes were
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