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Earl held a one-half interest in the Shoshone Note and that the
note had an unpaid principal balance of $417,600. Petitioner has
not, however, established the note's value. Moreover, petitioner
has not provided a reliable account of Earl's liabilities. This
incomplete picture of Earl's financial status is inadequate to
satisfy petitioner's burden to substantiate an exclusion under
section 2040(a) for one-half of the value of the Joint Tenancy
Account. The claims of creditors may have reduced or eliminated
the amount of funds available to satisfy Rory's legacy. Thus,
petitioner has failed to prove that any of the funds in the Joint
Tenancy Account originally belonged to Rory and were not received
by him from the decedent for less than full and adequate
consideration in money or money's worth.
Accordingly, we conclude that petitioner has failed to meet
its burden of proving that one-half (or any part) of the value of
the Joint Tenancy Account was excludable from the gross estate
under section 2040(a).
III. The Kotler Note
Petitioner deducted from the gross estate $363,458 relating
to the Kotler Note. With respect to indebtedness based on a
promise or agreement, section 2053(a)(3) allows a deduction from
the gross estate to the extent the indebtedness was contracted
bona fide and for adequate and full consideration in money or
money's worth. Sec. 2053(c)(1)(A). Petitioner contends that the
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