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agreed-upon monthly payment of $8,710. He altered the dates he
had originally written on all three checks, to indicate that they
had been written on January 1, 1993, February 2, 1993, and March
1, 1993. He also wrote memorandum lines on the checks to
indicate the month for which the payment was intended. Michael,
in his capacity as trustee of decedent’s trust, deposited all
three checks into decedent’s trust account on March 8, 1993.
After writing these three checks, Michael did not make any other
payments on the SCIN.
Decedent underwent a second coronary bypass operation on May
11, 1993. He died the next day "in the postoperative period
following his re-do coronary artery bypass grafting” having had
“a severe toxic reaction, presumably to the Protamine required to
reverse his heparinization”.
Decedent’s Federal estate tax return indicated that no tax
was due. The return identified the SCIN and included a copy as
an exhibit. The return indicated that the value of the SCIN was
zero. It stated that "pursuant to the terms of the note the note
was cancelled upon the death of Duilio Costanza."
Respondent issued a timely notice of deficiency proposing an
increase of $803,868 in decedent’s gross estate. The notice
explained that the proposed increase reflected respondent’s
conclusion that “[T]he sale between decedent’s trust and
Michael’s trust (the decedent’s son) is not recognized because it
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Last modified: May 25, 2011