Nancy Silverman and Estate of Sheldon Silverman, Deceased, Nancy Silverman, Executrix - Page 36

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               In light of these facts and circumstances, we conclude, and            
          we have found, that Nancy did not know and did not have reason to           
          know of the substantial understatement of tax for 1981.                     
               We hold for petitioners on this issue.                                 
          C. The Equities                                                             
               Respondent contends that it is not inequitable to hold Nancy           
          liable for the 1981 deficiency, because of the financial benefits           
          Nancy received from Sheldon.  In particular, respondent directs             
          our attention to the following:                                             
                    (1) Nancy came to the marriage with assets worth less             
               than $50,000 and left it after Sheldon's death with assets             
               worth more than $2.5 million, with "virtually all" of the              
               increase having been "accumulated from Mr. Silverman's                 
               earnings."                                                             
                    (2) Less than 3 months after receiving and depositing             
               the $81,054.77 tax refund check for 1981, Sheldon paid a               
               $12,840 life insurance premium from that account on his life           
               insurance policy 8013005.  When Sheldon died, Nancy received           
               a death benefit of $489,163 from that policy.  See supra               
               table 8.                                                               
                    (3)  The claimed $1,600,000 loss deduction freed up               
               $54,372.61 of Sheldon's 1981 income tax withholding to be              
               applied to Sheldon's and Nancy's 1980 income tax liability,            







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