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totally lacking in merit. As a matter of State law the gifts
were not completed prior to decedent's death. The issuance of
new checks by the executors is indicative that the executors were
aware that the original checks issued by decedent were not
negotiable. Thus, petitioner's position essentially is that the
gross value of the estate should be reduced for incomplete gifts;
this position is patently improper.
Furthermore, petitioner's argument that the checks are a
deduction from the gross value of the estate as a claim against
the estate pursuant to section 2053(a)(3) is similarly flawed.
To save petitioner from a finding that its position is not
patently improper, we would have to give credence to its argument
that a promise to make a gift to one's children based on love and
affection is a bargained-for exchange supported by adequate and
full consideration in money or money's worth. This we will not
do.
Moreover, Form 706 provides Schedule K for listing the debts
of the decedent. The 12 $10,000 checks were not disclosed on
Schedule K, or anywhere else on the Form 706, as debts owed by
decedent. Thus, we do not find the checks were adequately
disclosed as debts owed by decedent at the time of her death.
We hold, therefore, that petitioner is liable for the
accuracy-related penalty on the portion of any understatement of
tax required to be shown on the return with respect to its
position on the reduction of the gross value of decedent's estate
for the $120,000 of incomplete gifts.
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