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Claims For Refund of Estate Taxes
Petitioners made the first claim for refund on June 25,
1996. The basis for the claim is that $797,475.50 originally
reported as a bequest to Bell is properly to be reclassified as a
debt of the estate under a contract to make a will. Petitioners
claim a reduction in estate tax from $212,438.06 to zero.
Petitioners made the second claim for refund on July 22,
1996. The basis for that claim is that (1) on account of a prior
gift, only one half of the value of decedent’s residence is
properly includable in his gross estate ($200,000 rather than
$400,000), and (2) the estate incurred additional administrative
expenses of $138,327.86.2 Petitioners claim a reduction in
estate tax of $80,984.70.
OPINION
I. Introduction
During his life, Lloyd Cavett (decedent) made certain
payments to Rose Bell (Bell and the Bell payments). We must
decide whether the portion of the Bell payments determined by
respondent to be gifts (the Bell gifts) were gifts, as claimed by
respondent, or (in part) payments for services, as claimed by
petitioners. We must also decide (1) whether certain bequests to
2 On brief, petitioners state their intention to abandon
the claim with respect to the additional administrative expenses.
Therefore, we resolve it against petitioners and will not address
it further.
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Last modified: May 25, 2011