Estate of Lucille R. Devlin, Deceased, C. Ronald Lambert, Executor - Page 5




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          breach, petitioner contends, resulted in a constructive trust on            
          decedent's property to the extent of the gifts authorized but not           
          yet made.  Accordingly, petitioner argues that, when the                    
          remaining gifts were completed, they related back to the date of            
          the creation of the constructive trust.  Consequently, petitioner           
          argues that such gifts should not be included in decedent's gross           
          estate.3  Petitioner bears the burden of proof.  See Rule 142.              
          That the instant case was submitted to the Court fully stipulated           
          does not relieve petitioner of that burden.  King's Court Mobile            
          Home Park, Inc. v. Commissioner, 98 T.C. 511, 517 (1992).                   
               “State law creates legal interests and rights.  The federal            
          revenue acts designate what interests or rights, so created,                
          shall be taxed.”  Morgan v. Commissioner, 309 U.S. 78, 80 (1940).           
          Nebraska law provides, that in order for a conveyance to be a               
          completed intervivos gift, there must be donative intent,                   
          delivery, and acceptance.  See Lewis v. Poduska, 481 N.W.2d. 898,           
          902 (Neb. 1992).  Although Nebraska courts have sustained gifts             
          where delivery was incomplete, they have done so only where it is           
          clear that the donor took all of the necessary steps to complete            
          the gift and the possibility that completion of the gift might              
          fail was in the hands of another party.  See Rorabaugh v. Garvis,           


          3    Although petitioner claimed on the estate tax return a                 
          deduction for the gifts made pursuant to the order, petitioner              
          has conceded by stipulation that sec. 2053 does not support the             
          deduction of those gifts from the gross estate.                             





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