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On Part 1 of Schedule M, which calls for a list of
"Property Interests Which Are Not Subject to a QTIP
Election", the executor reported the property specifically
devised to Mrs. Rapp, consisting of the couple's residence,
the household furnishings, and the decedent's personal
effects, in the aggregate amount of $435,262.50. On
part 2 of Schedule M, which calls for a list of "Property
Interests Which Are Subject to a QTIP Election", the
executor reported $3,444,087.28. That amount is composed
of the value of the assets available for distribution to
the testamentary trust, $5,086,882.60 (i.e., total gross
estate, $5,627,722.06, less assets devised to Mrs. Rapp,
$435,262.50, and assets jointly owned with other
individuals, $105,576.96), less the portion of the property
that was not subject to the QTIP election, $802,510.21, and
the aggregate nonmarital deductions claimed on the return,
$840,285.11. The marital deduction claimed on the return
is $3,683,899.38. It consists of the total interests
passing to Mrs. Rapp, $3,879,349.78 (i.e., $3,444,087.28
plus $435,262.50) less Federal estate taxes, $156,424, and
other death taxes, $39,026.40.
In the notice of deficiency issued to petitioner,
respondent determined that petitioner had "failed to fully
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