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him by reference to the total amount that petitioner and her
husband were permitted to give him in a particular year without
the imposition of Federal gift tax, after taking account of the
annual exclusion provided by section 2503(b) and the gift-split-
ting provisions of section 2513(a)(1).
In an undated letter that petitioner wrote to Robert, and
that Robert signed on February 5, 1987 (February 1987 letter to
Robert), petitioner summarized the amounts that she considered
paid as of January 3, 1986, with respect to the $100,000 check
that she had issued to him on October 4, 1982, as follows:
Jan. 22, 1984 $15,000
Mar. 31, 1985 15,000
Jan. 3, 1986 15,000
Petitioner omitted from the February 1987 letter to Robert the
$10,000 amount forgiven that was stated in the unsigned forgive-
ness letter to him.
PKF recorded a $10,000 credit to the "Note Receivable--B.
Miller" account in petitioner's general ledger on December 31,
1983. No other entries were made to that account during the
period 1982 through 1989.
Petitioner filed a Federal gift tax return for 1982 that was
prepared by PKF. The $10,000 amount forgiven that was stated in
the unsigned forgiveness letter to Robert was not reflected as a
gift to Robert in petitioner's 1982 Federal gift tax return.
Petitioner did not file Federal gift tax returns for the years
1983 through 1986. Petitioner filed Federal gift tax returns for
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