Estate of Lewis A. Bailey, Deceased, Frances Jeanette Foster, Executrix - Page 33

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          $30,000, reflecting three $10,000 annual exclusions).  Petitioner           
          argues that the promissory note was decedent’s and Melba’s joint            
          property and appears to contend that the assignment should be               
          regarded as gifts from decedent and Melba equally.                          
               Respondent asserts that the promissory note was                        
          consideration to the grantor trust for its sale of the Lake                 
          Catherine property to the Manesses.  Petitioner counters that               
          respondent’s assertion is bald speculation.  Petitioner, however,           
          has offered no other explanation for the promissory note’s being            
          made payable to the grantor trust.12  We believe that the                   
          evidence in the record fairly supports an inference that the                
          promissory note was in fact consideration for the Lake Catherine            
          property, which had been decedent’s separate property before he             
          placed it in the grantor trust.  Consequently, pursuant to the              
          antenuptial agreement, Melba would have had no interest in either           
          the Lake Catherine property or the promissory note, either before           
          or after decedent’s revocation of the grantor trust.                        
          Accordingly, we conclude, as respondent has determined, that in             
          assigning the promissory note to three of his children, decedent            
          made three unreported taxable gifts totaling the face amount of             

               12 On brief, petitioner makes various arguments predicated             
          on a supposition that the promissory note was made payable to               
          decedent and Melba jointly.  Petitioner has offered neither the             
          promissory note nor any other evidence in support of this                   
          supposition.  The only evidence on this score is found in the               
          assignment of the promissory note, which decedent and Melba                 
          executed on Jan. 31, 1995, and which states that the promissory             
          note was “in favor of Lewis A. Bailey Family Trust”.                        

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