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to the residence and operated for the most part only to the
extent that decedent furnished it with funds. Funny Hats used
the funds that it received from decedent to pay indirectly the
same types of expenses that she had paid directly before she
transferred the residence to Funny Hats. Shortly after decedent
died, Funny Hats sold the residence and conducted no activity
except for limited tasks related to the liquidation of Funny
Hats.
Second, decedent’s relationship to the residence following
its transfer to Funny Hats was not treated by either decedent or
Funny Hats as that of a tenant to leased property. Decedent was
frequently delinquent in paying, or failed to pay, rent due under
the terms of the lease agreements. Decedent also did not pay
rent every year upon signing the lease, as also was required by
the terms of the lease agreements. Yet in no instance did Funny
Hats send decedent a late notice, accelerate her installment
payments, make a written demand for payment, seek her eviction,
or ask her to post a security deposit. Nor did Funny Hats set
decedent’s rent at FRV; the rent was set at a lesser amount that
was considered necessary to maintain the residence. It also
appears that decedent directly paid the taxes on the residence in
1994 and that she directly paid the insurance on the residence in
both 1994 and 1995.
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