Estate of Margot Stewart, Deceased, Brandon Stewart, Executor - Page 7

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          amount of income and expenses was allocated to decedent’s and Mr.           
          Stewart’s interest in both properties.  The parties did not sign            
          a written agreement to reconcile the income and expenses, and Mr.           
          Stewart’s testimony relating to an oral agreement was not                   
          credible.  Indeed, Mr. Stewart’s accountant testified that he did           
          not recall being informed about an agreement to reconcile the               
          income and expenses.  We do, however, conclude that Mr. Stewart             
          and decedent had an implied agreement that decedent would retain            
          the economic benefits of the 61st Street property.  Decedent                
          certainly met the terms of that agreement.  Thus, the full value            
          of the 61st Street property must be included in decedent’s                  
          estate.  Sec. 2036(a); Estate of Hendry v. Commissioner, supra at           
          III. Property Tax Deduction Is Disallowed                                   
               After decedent’s death, Mr. Stewart paid $10,153 in property           
          taxes relating to decedent’s 51-percent interest in the 61st                
          Street property.  The estate contends that the estate is entitled           
          to a deduction relating to property taxes paid by Mr. Stewart.              
          At the time of her death, decedent did not have an outstanding              
          property tax obligation relating to her 51-percent interest in              
          the 61st Street property.  Pursuant to section 2053(c)(1)(B),               
          property taxes are not deductible by an estate unless the taxes             
          are an enforceable obligation of the decedent at the time of her            
          death.  See also sec. 20.2053-6(b), Estate Tax Regs.                        

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