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estate contends that the note was the result of a bona fide
contract for full and adequate consideration in money or money’s
worth as required under section 2053(c)(1)(A). The estate also
contends that decedent received full and adequate consideration
for her promise to pay Advance Leasing $400,000 because she
received 4,000 shares of stock in a corporation that appeared
ready to become profitable.
The estate argues that by April 29, 1997, Advance Leasing
had experienced a dramatic turnaround. The estate points out
that, in contrast to its losses for 1994, 1995, and 1996, Advance
Leasing reported $29,663 of taxable income before net operating
loss deductions on its 1997 income tax return.
3. Whether Decedent Received Full and Adequate
Consideration for the Stock Subscription Agreement
We first decide whether decedent’s receipt of 4,000 shares
of Advance Leasing stock on April 29, 1997, was full and adequate
consideration for her agreement to pay $400,000 to Advance
Leasing under the stock subscription agreement.6
The estate contends the 4,000 shares of stock were adequate
consideration because Advance Leasing’s financial situation
improved dramatically from 1996 to 1997. Advance Leasing
reported $29,663 of taxable income before net operating loss
6 The estate contends that the burden of proof in this case
is shifted to respondent under sec. 7491(a). We need not decide
that issue because we decide this case on the basis of the
preponderance of evidence without regard to the burden of proof.
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