David C. Jonson and Estate of Barbara J. Jonson, Deceased - Page 8

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               The Jonsons had three children, all of whom were in college            
          during the audit years.  Aside from some unspecified amounts of             
          money from student loans and the children’s summer employment,              
          the Jonsons paid for their children’s college educations.  For at           
          least a portion of the audit years, they had a Guatemalan                   
          exchange student living with them.                                          
          Barbara’s Estate                                                            
               Barbara died testate, leaving her entire estate (the estate)           
          to David.  The estate had a value of $365,204, and it consisted             
          primarily of Barbara’s retirement savings.  On December 2, 1996,            
          David disclaimed his interest in the estate pursuant to a                   
          document that directed that the residual estate “be advanced to             
          their three children in equal shares, in [stock of] Jonson                  
          Management Company, Inc.” and that he, David, “continue to manage           
          that corporation under his contract”.6                                      
          The Jonsons’ Financial Affairs                                              
               During the audit years, the Jonsons maintained only one                
          checking account and one savings account, over both of which each           
          had signature authority.  During those years, Barbara reconciled            

               6  We note that David’s directive regarding Barbara’s                  
          residual estate appears not to satisfy sec. 2518(b)(4), which               
          provides, in pertinent part, that a “qualified disclaimer” is an            
          “unqualified refusal by a person to accept an interest in                   
          property”, provided that the disclaimed interest “passes without            
          any direction on the part of the person making the disclaimer”.             
          (Emphasis added.)  See also sec. 2046.  Because neither party has           
          raised any issue with respect to sec. 2518(b)(4), we do not                 
          further discuss it.                                                         

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