Anthony J. and Denise D. Sadberry - Page 10

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          had attended Georgetown on a disadvantaged student scholarship,             
          he decided to honor the school’s request.  By letter dated                  
          November 19, 1999, he informed Georgetown that he would make a              
          commitment of $25,000 to the endowment.  An Endowed Fund                    
          Agreement with Georgetown was executed in March 2000 wherein                
          petitioner agreed to pay $5,000 per year toward his commitment.             
          The first pledge payment was made in January 2000.  Petitioner              
          agreed that this pledge would be a debt of his estate.                      
               Petitioners filed a joint, self-prepared Federal income tax            
          return timely for 1999 (original return) on which they reported             
          the following income:                                                       

                    Salaries & wages                   $145,675.15                    
                    Taxable interest income                 577.97                    
                    Unemployment compensation             5,594.00                    
                    Other income (Form 1099)              3,396.60                    
                    Total income                     $155,243.72                      

          No income was reported on Line 16a of the return for pension and            
          annuity income.  The return shows an income tax liability of                
          $34,538.64, Federal income taxes withheld of $35,524.89, and an             
          overpayment of $986.26, which was in due course refunded to                 
          petitioners.  The $35,524.89 in taxes withheld did not include              
          the taxes withheld in the SFB and Glenbrook annuity distributions           
          earlier described.  Lines 50 through 56 of the tax return, Form             
          1040, is for “other taxes”; Line 53 is for “Tax on IRAs and other           
          retirement plans.”  Petitioners did not report any amount on Line           





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