-31-
checks to generate funds that were used to maintain the
residence.
Petitioner attempts to equate decedent’s payment of rent
with FRV by arguing that decedent shared the residence with
others. As we understand petitioner’s argument, Funny Hats
retained a right under the lease agreements to use (or designate
who could use) the residence in derogation of decedent’s wishes
and without the payment of rent in that (1) the agreements stated
that the “children of the party [decedent] may use the premises”,
(2) the partners of Funny Hats were decedent’s children and
children-in-law, and (3) the partners, as effective owners of the
residence through their interests in Funny Hats, did not have to
pay themselves rent for their (or their designated person’s) use
of the residence. As we further understand petitioner’s
argument, Funny Hats, pursuant to these retained rights, allowed
David Disbrow to possess all of the residence, except for
decedent’s bedroom which decedent possessed under the lease
agreements, and decedent, therefore, was required to pay only the
portion of the FRV of the residence that corresponded to the
portion of the residence that she possessed. As we understand
the conclusion of petitioner’s argument, decedent paid FRV for
her “shared usage” of the residence in 2000 in that she paid
Funny Hats $4,000 in rent for the first quarter of that year.
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