Estate of Ona E. Hendrickson - Page 8




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          marital deduction ultimately allowed to Garry's estate, was                  
          $2,154,781.                                                                  
               As filed with respondent, petitioner's estate tax return                
          reported a gross estate of $1,107,141, a taxable estate of                   
          $272,756, and adjusted taxable gifts of $313.                                
               Garry's will left the residue of his estate to the children.            
          His will specifically provided that all Garry's debts and                    
          expenses of estate administration and all inheritance and other              
          transfer taxes were to be paid from the residuary estate, without            
          apportionment.                                                               
               Garry's estate ultimately paid respondent and the State of              
          Indiana a total of over $1 million on account of estate and                  
          inheritance taxes.  The parties agree that pursuant to Garry's               
          will these taxes (and all administration expenses) were the                  
          obligation of the children, to be paid out of their shares of the            
          estate.                                                                      
               During the 14-year period between Garry's death and                     
          decedent's death (i.e., from 1979 to 1993) Garry's estate was                
          neither wound up nor terminated.  Instead, it was administered as            
          an unsupervised estate; decedent was the personal representative.            
          Garry's estate therefore continued to hold substantial assets and            
          to receive substantial amounts of income during this period.                 










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