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Petitioner contends that, pursuant to section 2053(a)(3), it
is entitled to a deduction for USM's claim under the
"SUBSCRIPTION AGREEMENT". Under section 2053(a)(2), claims
against an estate are deductible. To be entitled to this
deduction, petitioner must establish that the claim was
enforceable. Sec. 20.2053-4, Estate Tax Regs. Petitioner bears
the burden of proof. Rule 142(a).
In support of its claim, petitioner produced a copy of a
document entitled "SUBSCRIPTION AGREEMENT". It provided as
follows:
I Bonnie J. Harden agree upon demand at any time after
January 1, 1989 to invest $300,000.00 (Three Hundred
Thousand Dollars) in USM Funding Inc., in accordance
with the "Accounts Receivable Management and Co-
Factoring Agreement" which has been reviewed by me.
Petitioner failed, however, to produce the Accounts Receivable
Management and Co-Factoring Agreement. As a result, petitioner
has not established that the Subscription Agreement was
enforceable.
Petitioner contends in the alternative that, pursuant to
section 2053(a)(3), it is entitled to a deduction relating to the
promissory note issued to Rory. Section 20.2053-4, Estate Tax
Regs., provides that only amounts representing obligations at the
time of the decedent's death may be deducted under section
2053(a)(3). Bonnie died before petitioner borrowed the funds and
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