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bankruptcy court granted the Grynbergs leave to proceed with
their appeal of the superior court’s judgment. That appeal,
however, was ultimately unsuccessful: the California Court of
Appeal affirmed the judgment, and the U.S. Supreme Court denied
certiorari.
In his bankruptcy filings, petitioner listed his intrafamily
transfers of mineral interests made in the preceding year and
named the United States as a disputed creditor for gift taxes.
Petitioner never filed Federal gift tax returns on these trans-
fers, contending that they were not taxable gifts.3
Throughout the bankruptcy proceedings, the court observed
many times that, although Mrs. Grynberg “claims an interest in
the Lease, * * * [petitioner] also asserts a contingent
beneficial interest in the Lease.” In April 1982, the court
approved a joint plan of reorganization and treated the couple’s
property as common assets from which all liabilities would be
paid. The Danzig claimants eventually received the full amount
of their judgment against the Grynbergs, plus accrued interest.
As required by law, the Grynbergs filed separate Federal
income tax returns for calendar years 1981 and 1982, the years in
which they were in bankruptcy. On their separate Schedules C
attached thereto, they divided the income and expenses of JGA
3Petitioner now concedes that his assignments of overriding
royalties to his children’s trusts were completed gifts subject
to tax.
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Last modified: May 25, 2011