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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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