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petitions and caused them to be filed with this Court on behalf
of the estate.
Mrs. Peterson had informed Mr. Harkavy that the $200,000
unsecured note payable to the partnership and reported in the
estate tax return represented the decedent’s obligation to make a
capital contribution to acquire a 20-percent interest in the
partnership. Although Mr. Harkavy did not believe that the
$200,000 deduction would be sustained, he advanced that item on
the estate’s behalf with respondent. In response to respondent’s
counsel during settlement discussions, Mr. Harkavy conceded the
$200,000 disallowance of the unsecured note and the resulting
adjustment.
The gift tax deficiencies were based on respondent’s
determinations that checks in the amounts of $120,000 for 1994,
$281,100 for 1993, $303,400 for 1992, and $225,850 for 1991 were
all taxable gifts made to the partnership. The estate petitioned
this Court with respect to the estate and gift tax notices of
deficiency, and both cases were answered by respondent and placed
in issue.
The estate did not express or argue the position that the
$930,350 in checks given by decedent to the partnership during
the last 3 years of her life, were contributions to capital.3
3 If the estate’s motion is granted, the estate intends to
argue that the $930,350 was a contribution to the partnership’s
capital.
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Last modified: May 25, 2011