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The 1990 Form 1120S of the agency shows Patricia Low owning
25 percent of the stock for the first 7 months of the year and
100 percent of the stock for the last 5 months of the year.
Patricia Low signed this return as president of the agency.
The Forms 1120S of the agency for 1991, 1992, and 1993 each
show Patricia Low as owning 100 percent of the agency stock.
These returns were signed by Patricia Low as president. The
Schedule K-1 for 1991 shows a loss of $80,830 flowing through to
Patricia Low, all of which she claimed on her individual Federal
income tax return for 1991. The Schedules K-1 for 1992 and 1993
show agency income of $28,594 and $37,462, respectively, flowing
through to Patricia Low, all of which she reported on her Federal
tax returns.
William Grinwis prepared Patricia Low's individual tax
returns for the years 1990, 1991, 1992, and 1993.
Procedural History of the Case
Respondent determined that the alleged bequest of $450,000
did not qualify for the marital deduction because it was a "non-
deductible terminable interest" under section 2056(b).
Petitioner originally alleged in the petition that "Decedent's
Will creates an unequivocal non-terminable obligation to pay to
her husband, or his estate, $3,750 per month for 10 years".
Respondent's answer denied petitioner's assignment of error in
that regard and denied the facts alleged by petitioner in support
of the $450,000 deduction. The Court granted respondent leave to
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