- 48 -
Accordingly, we hold that the "ordinary business transaction"
exception does not apply to this case.
E. Petitioner's Secondary Argument--Decedent Either Spent
Investment Income on Her Own Expenses or Received Full
Consideration for Any Income That Benefited Children
Petitioner asserts that, even if the ordinary business
transaction exception does not apply, decedent still did not make
taxable gifts of any of her $913,200 in investment income.
According to petitioner, whether or not a formal partnership
existed, most or all of decedent's income from Garry's estate was
used to pay decedent's share of the expenses of the family farm.
To the extent decedent's income was not used to pay farm
expenses, petitioner further argues that decedent received full
consideration for that income, in the form of a $166,500
receivable from HEI and the children's provision of services to
the family farm.
In our consideration of petitioner's primary argument, we
simply assumed that decedent transferred her net investment
income to the asserted family farm partnership. We now try to
determine what decedent (or Garry's estate) actually did with
decedent's net investment income. Although the record in this
case is extensive, it is unfortunately quite difficult to make
this determination, in part because there was extensive
commingling of estate and other funds among decedent and the
children.
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