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assumptions by the children (and their spouses), decedent
effectively became a guarantor, rather than a co-obligor, with
respect to most of the Land Bank loan.
In addition, the evidence shows that neither decedent nor
Garry's estate claimed any deductions for Federal income tax
purposes with respect to the interest on the Land Bank loan.
This strongly suggests that the signatories to the loan did not
consider decedent to be the true obligor of the loan. See sec.
20.2053-6(f), Estate Tax Regs. (an enforceable agreement between
spouses concerning the allocation of their joint income tax
liability may limit the amount of income taxes allowable as a
claim against the estate, notwithstanding the spouses' joint and
several liability for the taxes to the Commissioner).
For all these reasons we find that the Land Bank loan
payments were not decedent’s expenses.
6. Decedent's Income Was Not Used To Pay Decedent's Share
of Expenses of Any Business Other Than Family Farm
The bulk of petitioner's argument and evidence concerns the
asserted use of decedent's investment income to pay the expenses
of the family farm, to purchase an HEI receivable, or to induce
the children to perform services for the family farm. On brief,
however, petitioner attempts to muddy the waters by suggesting
that some of decedent's funds may have been used to pay
decedent's share of the expenses of Hendrickson family businesses
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