- 33 -
$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”.
Page: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 NextLast modified: May 25, 2011