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The estate filed Federal gift tax returns (Form 709)
reporting the 1993 and 1994 gifts and claiming six annual gift
tax exclusions in each year for the values of the gifts.7 As a
result, the estate reported no net gifts for 1993 and $2,000 in
net gifts for 1994.
The estate filed a timely Federal estate tax return (Form
706) reporting a total gross estate of $1,427,908 and adjusted
taxable gifts of $252,000. The 1993 and 1994 gifts made pursuant
to the powers of attorney were not included in calculating
decedent’s gross estate. Following an examination, respondent
mailed a notice of deficiency to the estate in which respondent
determined, among other things, that the 1993 and 1994 gifts
“which were transferred during decedent’s lifetime by the
decedent’s attorney in fact under a durable power of attorney
that did not expressly authorize the attorney in fact to make
gifts are includable in the decedent’s gross estate.”
OPINION
Respondent’s Objections
We first address respondent’s objections to the testimony of
witnesses Ms. Thompson and Mr. Walker. At trial, the Court
conditionally admitted the testimony over respondent’s objection
7The 1993 and 1994 gifts did not impoverish decedent or
adversely impair her ability to support herself. On the date of
her death, decedent owned assets having a value in excess of
$1,400,000.
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