Estate of Austin Korby - Page 9

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          $12,061 for income taxes owed by its limited partners and                   
          reported the tax payments as distributions to its limited                   
               For 1995, 1996, 1997, and 1998, the living trust used income           
          from Austin and Edna’s Social Security payments and the                     
          guaranteed payments from KPLP to pay approximately $2,500 per               
          month to Pelican Lake Health Care Center for Edna’s care.  Austin           
          and Edna reported medical expenses of $37,684, $38,586, and                 
          $40,216 on their 1995, 1996, and 1997 Federal income tax returns,           
               In June 1998, KPLP redeemed the U.S. savings bonds that                
          Austin and Edna had contributed in 1995.  The U.S. Treasury                 
          issued KPLP two checks for $43,638 each.  One check was endorsed            
          to the National Western Life Insurance Co. to purchase an                   
          annuity.  On the annuity application, Dennis was named as the               
          annuitant, and the four Korby sons were named as the four equal             
          owners and beneficiaries.  The other check was deposited into the           
          living trust’s checking account.  KPLP did not report this amount           
          on its 1998 return as a distribution or a guaranteed payment to             
          the living trust.  From these funds, the living trust issued a              
          $10,000 check to each of the Korby sons and retained the                    
          remaining $3,638.  KPLP reported the interest earned on the U.S.            
          savings bonds as income on its 1998 Federal income tax return.              

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Last modified: May 25, 2011