- 28 -
$711,841 of coal royalties, dividends, and interest received by
the estate during 1980-92. Respondent also determined that
decedent did not exercise her right to receive this investment
income, but instead allowed its economic benefit to be enjoyed by
the children. Respondent further determined that decedent
thereby made indirect gifts of the investment income to the
children, which gifts are "taxable gifts" for purposes of section
2503 and the other estate and gift tax provisions of the Code.
After having reviewed petitioner's responses to certain
interrogatories, respondent, by amended answer, asserted that
decedent had become entitled to an additional $332,945 of the
investment income of Garry's estate. Respondent further asserted
that decedent similarly made taxable gifts of this additional
income to the children. The entire increased deficiency asserted
in the amended answer is attributable to the asserted gifts of
this additional investment income.8
Respondent made several concessions after the amended
answer. Respondent now maintains that decedent became entitled
to a total of only $999,769 of the investment income of Garry's
estate during the period extending from Garry's death in 1979 to
8 With respect to the deficiency determined in the notice,
respondent's determination is presumed to be correct; petitioner
bears the burden of proving it wrong. See Rule 142(a); Welch v.
Helvering, 290 U.S. 111 (1933). Respondent bears the burden of
proof with respect to the increased deficiency asserted in the
amended answer. See Rule 142(a).
Page: Previous 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 NextLast modified: May 25, 2011