Estate of John Kenly, Deceased, Betty B. Kenly, Personal Representative - Page 18

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            the full value of that property is includable in the gross                                    
            estate, and the marital deduction equals one-third.  If we find                               
            that the Bard property was community property, then only one-half                             
            of the value of that property is includable in the gross estate,                              
            and the marital deduction equals that one-half.  Petitioner bears                             
            the burden of proof.  Rule 142(a).                                                            
            III.  Analysis                                                                                
                  A.  Introduction                                                                        
                  The parties agree that decedent’s ownership of the Bard                                 
            property can, at least in major part, be traced back to                                       
            decedent’s ownership of an interest in the New Mexico ranch.3  We                             
            must decide whether the New Mexico ranch was community property                               
            or separate property in decedent's hands at the time he acquired                              
            his interest therein.  If decedent acquired his interest in the                               
            New Mexico ranch as separate property, we must determine whether                              

            3     On brief, petitioner states:  “The evidence shows that the                              
            Bard Ranch property was acquired in exchange for Dunlap property                              
            in Arizona which was exchanged for the * * * [New Mexico] Ranch                               
            property in New Mexico.”  Petitioner ignores the fact that 125                                
            acres of the Bard property was acquired by purchase.  Petitioner                              
            has neither averred nor proposed as a finding of fact that any of                             
            the purchase price of that 125 acres was paid with community                                  
            funds.  Indeed, we have found that a substantial portion of the                               
            purchase price was paid by decedent’s mother.  That, of course,                               
            suggests a gift to decedent.  We assume from petitioner’s failure                             
            to plead or propose facts consistent with decedent’s purchase of                              
            his interest in the property with community funds that petitioner                             
            relies solely on the argument that, although not initially                                    
            community property, decedent’s interest in the 125 acre tract                                 
            subsequently became community property.  If petitioner intends                                
            any other argument, she has failed either to propose a factual                                
            predicate therefor or to state such argument.  We shall consider                              
            only the argument petitioner made.                                                            

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