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The 1992 Federal gift tax return showed gifts to 19
relatives of decedent made on August 27 or 28 or September 12,
1992. These gifts included 19 separate annuities, 3 Series E
bonds, and $4,000 in cash, with a total reported value of
$293,249. The estate claimed nineteen $10,000 exclusions under
section 2503(b), in the total amount of $190,000, resulting in a
net taxable gift of $103,249. After the gifts in issue were
made, the total gross estate, as reported on the estate tax
return, exceeded $973,000.
Rosa Neff purchased the 19 separate annuities in 1987 from
Delta Life and Annuity Co. (Delta Life). The 19 annuitants were
decedent's nephews and nieces, a sister-in-law, and a former
brother-in-law (Chris Hunt). On each of the annuities, decedent
was listed as the owner, and the annuitant was listed as the
contingent owner. The contingent owner would become the owner at
the death of decedent. Jess Murphy was the selling agent on
behalf of Delta Life with respect to the 19 annuities. The 19
annuities were transferred to their respective “annuitants” on or
about August 27, 1992, according to the schedules attached to the
Federal estate and gift tax returns. The three Series E bonds
were transferred on August 28, 1992. The $4,000 in cash was
transferred on September 12, 1992.
These gifts of annuities, bonds, and cash were executed by
Chris Hunt, Melvin Hammontree, and Mildred Williams, who at the
time jointly held a durable power of attorney on behalf of
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