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In August 1993, the Glenview house was sold for $459,000.
On September 10, 1993, Ms. Scott filed the Federal estate tax
return for the estate. On the estate tax return, Ms. Scott
included 50 percent of the value of the Glenview house ($229,500)
in the gross estate and deducted 50 percent of the remaining
mortgage note balance ($14,500). In the notice of deficiency,
respondent determined that 100 percent of the value of the
Glenview house should have been included in the gross estate
($459,000) less selling expenses, and that 100 percent of the
remaining mortgage note balance ($29,000) should have been
deducted.
Discussion
In order to establish that Ms. Horstmeier owned only 50
percent of the Glenview house at the time of her death,
petitioner argues that a resulting trust with respect to one-half
of the property arose in favor of Ms. Scott at the time the house
was purchased. Thus, petitioner argues, under Illinois law Ms.
Scott held the beneficial interest in one-half of the Glenview
house and Ms. Horstmeier held only bare legal title with respect
to that half. Respondent argues that petitioner has failed to
prove the facts necessary to establish the existence of a
resulting trust. We agree with respondent.
To decide whether a resulting trust arose, we apply the law
of the State of Illinois. “[W]hat constitutes an interest in
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