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Trust. In addition, Lewis, Betty, and Jack entered into the
agreement as the owners of the Weinstock Residence.
Prior to closing, Purchaser performed a title search and
discovered that Lewis, Betty, and Jack could convey no greater
interest in the Weinstock Residence than a life estate pur autre
vie, which was measured by the life of decedent. To quickly
remedy the defect, and effect the sale, Lewis, Betty, and Jack
conveyed their interests in the Weinstock Residence by quitclaim
deed to the Carolyn Trust on July 23, 1987.
Due to reasons unrelated to the problem with the title to
the Weinstock Residence, Purchaser did not purchase the entire
Weinstock Property; instead it bought only the 28.75-acre portion
for $6,000,000.
Shortly after Lewis, Betty, and Jack conveyed their
interests in the Weinstock Residence to the Carolyn Trust,
decedent transferred $90,000 to them. In the following year, on
July 15, 1988, the remaining acreage of the Weinstock Property
was sold to a different buyer. The JKH Trust sold its interest
for $50,000, the Carolyn Trust sold the Weinstock Residence for
$90,000, and decedent sold her residence on Lake Forrest Drive
for $600,000.
Respondent determined that decedent made an unreported gift
to Lewis, Betty, and Jack of her entire interest in the Weinstock
Residence in 1984, or in the alternative, respondent asserted by
an amendment to the answer, that the transfer in 1984 was void
and that decedent made an unreported taxable gift of $90,000 to
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