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1979-93 will also determine petitioner's gift tax liability in
the related controversy.
We conclude that decedent gave $913,200 in investment income
to the children as argued by respondent on brief, except to the
limited extent we find the income was used to pay decedent's
share of family farm expenses.
The unpaid mortgage issue concerns whether petitioner may
deduct, as an unpaid mortgage under section 2053(a)(4), part of
the outstanding balance (at decedent's death) of a secured bank
loan. The resolution of this issue requires us to consider the
amount of the security for the loan that was included in
decedent's estate.
We conclude that petitioner is not entitled to a deduction
for the loan.3
FINDINGS OF FACT
Some of the facts have been stipulated and are so found; the
stipulation of facts and the related exhibits are incorporated by
this reference.
3 In the statutory notice, respondent denied any deduction
for the bank loan and also asserted that decedent gave the loan
proceeds to her children. Respondent has since conceded that
these are alternative positions. Our conclusion that petitioner
may not deduct the outstanding loan balance therefore renders
moot respondent's contention that the proceeds of the loan were a
gift.
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