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owned by decedent. However, the record does not establish that
decedent's income was sufficient to cover all of her personal
living expenses, and her obligations to First National, and her
other expenses, and also to permit her to accumulate sufficient
assets to repay the $100,000 transferred to her. Rather, the
regular and continuous borrowing of decedent is an indication
that her annual income was not sufficient to allow her to
maintain her lifestyle and repay her obligations.
Notwithstanding decedent's insufficient income as a source
of repayment, the record shows that decedent owned sufficient
assets to repay the transfers. There is no indication in the
record, however, that the cotrustees would or could have required
decedent to sell or mortgage those assets for that purpose.
On the record before us, petitioner has failed to establish
that, at the times in 1989 when Jack, as cotrustee of the JKH
Trust, transferred $50,000 (total $100,000) to decedent, he
reasonably believed that she would be able to repay those amounts
on demand.
8. Records of the Transfers as a Loan.
The only records relating to the transfers at issue that
indicate the transfers were loans is the one word notation,
"Loan", that Jack made on each of the checks. Furthermore, as
Jack deposited the checks into the Special Dividend Account
without her endorsement, there is no evidence that decedent ever
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