1998 Tax Ct. Memo LEXIS 309">*309 Decision will be entered under Rule 155.
MEMORANDUM FINDINGS OF FACT AND OPINION
RUWE, JUDGE: Respondent determined 1998 Tax Ct. Memo LEXIS 309">*310 a deficiency of $443,960 in petitioner's Federal estate tax. After concessions, the issues remaining for decision are: (1) To what extent, if any, did Ms. Friedeberg contribute toward the purchase of various real properties, bank accounts, and certificates of deposit that were held in the joint name of decedent and Ms. Friedeberg on the date of decedent's death; (2) whether decedent's estate is entitled to reduce the amount required to be included under
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. The stipulation of facts and supplemental stipulation of facts are incorporated1998 Tax Ct. Memo LEXIS 309">*311 herein by this reference.
Albert Fratini (decedent), who was a resident of San Francisco, California, died on June 2, 1992. Decedent was not married when he died. For 18 years preceding his death, decedent continuously lived with Marion Friedeberg. Ms. Friedeberg is the estate's personal representative and the sole beneficiary under decedent's holographic will. At the time she filed the petition herein, Ms. Friedeberg resided in San Francisco, California.
Before beginning his relationship with Ms. Friedeberg, decedent was married to Ms. Annemarie Fratini. Decedent and Ms. Fratini were married on January 2, 1962. They separated on June 4, 1974, and their marriage was terminated by a final judgment of dissolution in the Superior Court of San Francisco County, California, dated March 8, 1978.
Ms. Friedeberg was born on April 7, 1933, in Berlin, Germany. Between 1943 and 1946, Ms. Friedeberg spent 2-1/2 years in a concentration camp during World War II. She moved to the United States in 1947 and attended school until the 11th grade. Upon leaving school, Ms. Friedeberg became employed as a filing clerk until 1950.
From August 26, 1951, to August 26, 1976, Ms. Friedeberg was married to 1998 Tax Ct. Memo LEXIS 309">*312 Mr. Werner Friedeberg. They separated on June 2, 1974, and their marriage was terminated on August 26, 1976, pursuant to a final judgment of dissolution in the Superior Court of San Francisco County, California. Mutual friends introduced decedent and his wife to Ms. Friedeberg and her husband in 1970. From 1970 to 1974, the couples maintained a casual friendship. In June 1974, both couples separated and decedent and Ms. Friedeberg began living together.
At the time that decedent and Ms. Friedeberg began living together, decedent was employed as a project engineer for Metal Tile Co. Although decedent and Ms. Friedeberg lived in San Francisco, decedent traveled to and worked in Los Angeles 3 to 4 days a week.
At the time decedent and Ms. Friedeberg began their relationship in 1974, decedent owned, among other things, several pieces of real property. From 1958 until his death, decedent owned a parcel of real property located at 517 Laidley Street (Laidley), San Francisco, California. The Laidley property was purchased for $12,000. On March 18, 1977, Ms. Fratini transferred her interest in Laidley to decedent by quitclaim deed. On December 11, 1987, decedent transferred to Ms. Friedeberg1998 Tax Ct. Memo LEXIS 309">*313 an undivided one-half joint tenancy interest in Laidley. The parties agree that the fair market value of Laidley on the date of decedent's death was $275,000.
From 1967 until his death, decedent owned a parcel of real property, including a building thereon, located at 3605 Valencia Street (Valencia), San Francisco, California. The building had 20 apartments and 6 commercial spaces. In 1971, decedent acquired an adjacent lot for parking. Hereinafter, we shall refer to the building and parking lot as Valencia. The purchase prices of the building and the parking lot were $1,85,108 and $6,000, respectively. At the time of purchase, the titles to the building and the parking lot were held in the names of decedent and Ms. Fratini as joint tenants. On March 18, 1977, Ms. Fratini executed a quitclaim deed to Valencia in favor of decedent as part of their marital dissolution proceeding. By grant deed, on December 10, 1987, decedent transferred to Ms. Friedeberg an undivided one-half joint tenancy interest in Valencia. The parties agree that the fair market value of Valencia on the date of decedent's death was $965,000.
From 1964 until his death, decedent owned a cottage1998 Tax Ct. Memo LEXIS 309">*314 located at 2437 South Fitch Road (South Fitch), Healdsburg, California. On August 21, 1964, decedent and Ms. Fratini acquired title to South Fitch as joint tenants for $9,600. In 1970, decedent acquired an adjacent lot at a cost of $2,000. Hereinafter, we shall refer to the cottage and the adjacent lot as South Fitch. On December 10, 1987, decedent transferred to Ms. Friedeberg an undivided one- half joint tenancy interest in South Fitch. 2 The parties agree that the fair market value of South Fitch on the date of decedent's death was $29,000.
From 1965 until his death, decedent owned a 10-unit apartment building located at 130 Acadia Street (Acadia), San Francisco, California. The original purchase price of Acadia was $128,869. As a result of his divorce from Ms. Fratini, decedent ended up with an undivided 10-percent interest in Acadia. On1998 Tax Ct. Memo LEXIS 309">*315 December 10, 1987, decedent transferred to Ms. Friedeberg an undivided one-half joint tenancy interest in his 10-percent undivided interest in Acadia. The fair market value of the 10-percent undivided interest in Acadia on the date of decedent's death was $25,000.
Prior to and during the time Ms. Friedeberg lived with decedent, she received various payments from the German Government. Beginning in 1954, Ms. Friedeberg received payments under a German restitution law as a result of her interment in a German concentration camp. From 1954 to 1966, Ms. Friedeberg received a total of $8,774.02 in restitution payments. Beginning in 1965 and through the date of decedent's death, Ms. Friedeberg also received monthly payments from the German Government totaling approximately $64,500.
After decedent and Ms. Friedeberg began living together, Ms. Friedeberg received several other amounts. On August 26, 1976, pursuant to a marital settlement agreement, Ms. Friedeberg received $15,000. On December 8, 1981, Ms. Friedeberg received a distribution in the amount of $29,177.53 from the estate of Lucian Lubinski. On or about November 5, 1983, Ms. Friedeberg received $7,5001998 Tax Ct. Memo LEXIS 309">*316 as a preliminary distribution from the estate of Hirtha Gray. Ms. Friedeberg also received a final payment on or about May 13, 1985, from the estate of Hirtha Gray in the amount of $6,185.46.
Decedent and Ms. Friedeberg jointly obtained interests in several other properties after they began living together. On February 10, 1983, decedent and Ms. Friedeberg acquired property located at 406 Chenery Street (Chenery), San Francisco, California, as joint tenants. The total downpayment for Chenery of $31,841.50 consisted of $1,000 cash and a check dated March 10, 1983, for $30,841.50. The cash and the check funds were drawn from a checking account held at California Federal Savings Bank, which account was in the joint names of decedent and Ms. Friedeberg. The parties agree that the fair market value of Chenery as of the date of decedent's death was $250,000.
On September 12, 1984, decedent and Ms. Friedeberg acquired property located at 941 Dolores Street (Dolores), San Francisco, California, as joint tenants. The purchase price of Dolores was $290,000. The escrow closing statement for the purchase of Dolores shows that a downpayment of $59,514.98 was 1998 Tax Ct. Memo LEXIS 309">*317 made in the form of a deposit, and the closing statement names both decedent and Ms. Friedeberg as the parties making the downpayment. On September 13, 1984, as part of the purchase transaction, decedent and Ms. Friedeberg assumed a previous loan from American Savings and Loan Association in the amount of $117,218.39 payable to the previous owners of the property. Decedent and Ms. Friedeberg also signed a note secured by a deed of trust in the amount of $112,781.61 payable to the previous owners. The parties agree that the fair market value of Dolores as of the date of decedent's death was $435,000. As of June 15, 1992, there was a mortgage loan balance from American Savings on the Dolores property of $79,387.24.
On March 27, 1985, decedent and Ms. Friedeberg acquired property located at 84 Onondaga Street, San Francisco, California, as joint tenants for $245,000. A downpayment of $47,817.16 was made as part of the Onondaga purchase transaction. Part of the downpayment consisted of a $100 check signed by Ms. Friedeberg dated February 15, 1985, drawn from an account held at Bank of America. 3 The remainder of the downpayment was paid with two checks1998 Tax Ct. Memo LEXIS 309">*318 drawn upon a joint account in the names of decedent and Ms. Friedeberg with Continental Savings and Loan dated February 27 and April 25, 1985. As part of the purchase transaction, decedent and Ms. Friedeberg signed a promissory note for $196,000 payable to the World Savings and Loan Association as lender. The parties agree that the fair market value of Onondaga as of the date of decedent's death was $340,000.
In addition to land and buildings, decedent and Ms. Friedeberg maintained joint bank accounts and purchased a number of certificates of deposit with funds drawn from those accounts. On April 6, 1979, Ms. Friedeberg closed her personal savings account with Bank of America by withdrawing the balance of $4,000. On the same day, a withdrawal of $16,000 was made from decedent's and Ms. Friedeberg's joint savings account with Bank of America, and a $20,000 certificate of deposit (CD) was purchased in the joint names of decedent and Ms. Friedeberg. Approximately 6 months later, 1998 Tax Ct. Memo LEXIS 309">*319 on October 5, 1979, decedent and Ms. Friedeberg jointly purchased a CD for $20,000 to mature on or about April 4, 1980.
On October 8, 1979, a withdrawal of $10,000 was made from decedent's and Ms. Friedeberg's joint savings account with Bank of America. On the same date, decedent and Ms. Friedeberg jointly purchased a CD in the amount of $10,000 to mature on or about April 7, 1980.
On January 14, 1980, a $10,000 withdrawal was made from decedent's and Ms. Friedeberg's joint savings account with Bank of America. On the same date, decedent and Ms. Friedeberg jointly purchased a CD in the amount of $10,000 to mature on July 14, 1980. In addition to the foregoing CD's, decedent and Ms. Friedeberg jointly owned a number of other CD's, which were purchased with either funds received from existing CD's that matured or funds from other sources.
On or about December 15, 1987, a fire occurred at the Dolores property. Decedent and Ms. Friedeberg received a total of $50,471.61 pursuant to a property claim agreement with State Farm Fire and Casualty Co. The funds from the fire insurance settlement were deposited on March 18, 1988, into a joint savings account held1998 Tax Ct. Memo LEXIS 309">*320 at Continental Bank in decedent's and Ms. Friedeberg's names. The Continental account was closed on March 6, 1989, and the closing balance was $100,390.73. The funds from the Continental account were invested and reinvested in several CD's in the joint names of decedent and Ms. Friedeberg held at Southern California Savings, Gibraltar Savings, and California Federal Bank.
On September 17, 1990, decedent and Ms. Friedeberg opened a joint CD at California Federal Bank. The balance of this CD, as of the date of decedent's death, was $100,000. Decedent and Ms. Friedeberg also had a balance of $26,244 in a joint checking account held with Bank of America. A second joint checking account was also held at Bank of America, which had a balance of $3,480 as of the date of decedent's death. Decedent and Ms. Friedeberg also had a joint savings account with Bank of America with a balance of $5,214 as of decedent's date of death.
In 1988 and 1989, decedent reported on his individual Federal income tax return rental income and loss from the Valencia, Chenery, Dolores, Onondaga, and South Fitch properties. Ms. Friedeberg did not report rental income or loss on her Federal1998 Tax Ct. Memo LEXIS 309">*321 income tax returns for 1988 and 1989. For the years 1990 through 1992, decedent and Ms. Friedeberg both reported income and loss from the rental properties. For the years 1981 through 1992, Ms. Friedeberg reported taxable interest income of $133,051. With respect to the $133,051 of interest income reported, approximately $3,440 was earned from accounts titled in Ms. Friedeberg's name alone.
Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, was timely filed for decedent's estate on September 4, 1993. On Schedule E, Part 2, of the Form 706, 11 items of property, which decedent held in joint tenancy with Ms. Friedeberg, were reported. With respect to the 11 items, decedent's estate reported contribution credits under
Form | ||||||
706 | ||||||
Form | Frac- | |||||
706 | tional | |||||
Sec. | Value | Inter- | ||||
2040 | Before | est Dis- | ||||
Value | Percent | Frac- | count | Form | ||
of Fee | Included | tional | Percent- | 706 re- | ||
Simple | Per Form | Dis- | age | turned | ||
No. | Description | Interest | 706 | count | claimed | Value |
1 | Checking Acct. #1 | $ 26,244 | 50.00 | $ 13,122 | -- | $ 13,122 |
2 | Savings Acct. | 5,214 | 50.00 | 2,607 | -- | 2,607 |
3 | Checking Acct. #2 | 3,480 | 50.00 | 1,740 | -- | 1,740 |
4 | CD | 100,000 | 50.00 | 50,000 | -- | 50,000 |
5 | Laidley | 275,000 | 100.00 | 275,000 | 15 | 233,750 |
6 | Valencia | 965,000 | 78.87 | 761,096 | 15 | 646,932 |
7 | South Fitch | 29,000 | 78.39 | 22,733 | 15 | 19,323 |
8 | Chenery | 250,000 | 53.68 | 134,200 | 15 | 114,070 |
9 | Dolores | 435,000 | 53.67 | 233,465 | 15 | 198,444 |
10 | Onondaga | 400,000 | 55.32 | 221,280 | 15 | 188,088 |
11 | Acadia | 90,000 | 100.00 | 90,000 | 35 | 58,500 |
1998 Tax Ct. Memo LEXIS 309">*323 In the notice of deficiency, respondent determined that decedent's estate was not entitled to claim any credit pursuant to
On Form 706, Schedule K, Debts of the Decedent, and Mortgages and Liens, decedent's estate claimed deductions for, among other things, a portion of the mortgages related to the Dolores and Onondaga properties. On Schedule K, decedent's estate allocated the mortgages on the properties in amounts equal to the
Mortgage | Loan | Percent | Claimed | |
Item No. | Description | Balance | Included | Balance |
1 | Dolores | $ 79,387 | 53.67 | $ 42,607 |
2 | Onondaga | 127,756 | 55.32 | 70,969 |
In the notice of deficiency, respondent determined that decedent's estate was entitled to deduct one-half of the date-of-death balances of the mortgages related to the Dolores and Onondaga properties.
OPINION
We must first decide whether the estate is entitled to contribution credits pursuant to
Petitioner 5 argues that Ms. Friedeberg contributed money and money's worth in services with respect to properties owned as joint tenants by decedent and Ms. Friedeberg. Petitioner argues that these contributions of money or money's worth in services constitute adequate consideration for Ms. Friedeberg's ownership interest in each of the contested assets. Petitioner ultimately argues that due to Ms. Friedeberg's alleged ownership interest, the estate is entitled to contribution credits under
1998 Tax Ct. Memo LEXIS 309">*325 Respondent argues that decedent's estate has failed to prove by a tracing of funds or otherwise that Ms. Friedeberg contributed her separate property or services for her interests in the jointly owned assets entitling the estate to credits under
(a) General Rule. -- The value of the gross estate shall include the value of all property to the extent of the interest therein held as joint tenants with right of survivorship by the decedent and any other person, or as tenants by the entirety by decedent and spouse, or deposited, with any person carrying on the banking business, in their joint names and payable to either or the survivor, except such part thereof as may be shown to have originally belonged to such other person and never to have been received or acquired by the latter from decedent for less than an adequate and full consideration in money or money's worth: * * *
1998 Tax Ct. Memo LEXIS 309">*327 Petitioner first argues that Ms. Friedeberg contributed consideration in the form of "money" to the value of the assets in decedent's estate. Petitioner argues that Ms. Friedeberg contributed her separate funds to jointly held bank accounts and thereafter, decedent and Ms. Friedeberg invested in various money market securities and real properties in which they sought to maximize income and acquire additional real property.
With respect to amounts that Ms. Friedeberg received after June 1974, the point at which Ms. Friedeberg and decedent began living together, Ms. Friedeberg claims that she received total monthly restitution payments of $57,220.15 from the German Government. Ms. Friedeberg also received $15,000 in August 1976 as a result of her divorce. Ms. Friedeberg received a distribution from the estate of Lucian Lubinski of $29,177.53 on December 8, 1981. On November 5, 1983, and May 13, 1985, Ms. Friedeberg received $7,500 and $6,185.46, respectively, from the estate of Hirtha Gray.
From the above-listed amounts, Ms. Friedeberg contributed1998 Tax Ct. Memo LEXIS 309">*329 $4,000 to the purchase of a jointly owned CD in July of 1979. In or around October of 1980, Ms. Friedeberg purchased a CD in the amount of $10,000 in her name with the money she received as restitution payments from the German Government. Upon maturity of the $10,000 CD, Ms. Friedeberg testified that the proceeds were ultimately contributed to the purchase of a CD in the joint names of decedent and Ms. Friedeberg. Ms. Friedeberg testified that during 1981 she contributed the $29,177 she received from the estate of Lucian Lubinski toward the purchase of a CD in the amount of $30,000 in the joint names of herself and decedent.
As evidence, Ms. Friedeberg offered a number of items in support of her testimony. Ms. Friedeberg offered summary schedules showing that she received from the German Government a total of $57,220.15 7 from June 1974 to June 2, 1992, the date of decedent's death. Ms. Friedeberg also offered bank statements dated in early 1981, which indicate that she owned a CD in the amount of $10,000. Ms. Friedeberg offered numerous bank statements that indicated that CD's were later purchased in the joint names of decedent and herself in amounts1998 Tax Ct. Memo LEXIS 309">*330 corresponding to the amounts Ms. Friedeberg testified that she and decedent purchased. Ms. Friedeberg offered probate documents from the Superior Court of San Francisco County, California, dated March 2, 1981, indicating that she received a distribution of $29,177.53 from the estate of Lucian Lubinski. With respect to the jointly acquired real properties, Ms. Friedeberg testified that the downpayments for Chenery, Dolores, and Onondaga were all paid with funds from bank accounts held in the joint names of decedent and Ms. Friedeberg. The downpayments for the Chenery, Dolores, and Onondaga properties were in the amounts of $31,841.50, $59,514.98, and $47,817.16, respectively, and totaled $139,173.64. The purchases of Chenery, Dolores, and Onondaga were all completed during the years 1983 through 1985. From 1974 to 1985, Ms. Friedeberg has shown that she received at least $71,862.8 One-half of the total downpayments for the properties would require a contribution of $69,586.82. 9 We find Ms. Friedeberg to be a credible witness, and we accept the veracity of her testimony. Thus, notwithstanding the fact that Ms. Friedeberg was unable to provide every1998 Tax Ct. Memo LEXIS 309">*331 receipt for each bank deposit, purchase of a CD, and receipts for each reinvestment into another CD, it is reasonable to conclude that she contributed one-half toward the total purchase prices of the Chenery, Dolores, and Onondaga properties.
Petitioner also argues that Ms. Friedeberg provided services in the form of management of the rental properties from 1974 until 1992. Petitioner argues that these services constitute1998 Tax Ct. Memo LEXIS 309">*332 adequate consideration contributed in "money's worth" to the values of the Laidley, Valencia, South Fitch, and Acadia properties, such that petitioner is entitled to exclude one-half of the total value of these properties from decedent's estate under
Our determination of whether Ms. Friedeberg provided full and adequate consideration is necessarily one of fact. See
In the instant case, Ms. Friedeberg testified that for a number of years she managed the rental properties. In support of Ms. Friedeberg's testimony, petitioner offered a number of check registers indicating that Ms. Friedeberg regularly kept the financial records regarding income and expenses related to the rental properties. Ms. Friedeberg submitted a substantial number of documents regarding the rental properties from sellers, insurance companies, mortgage banks, tenants, and title companies addressed to both decedent and Ms. Friedeberg. Ms. Friedeberg submitted many letters from tenants of the rental properties addressed to her alone. She had signature authority over the joint accounts and regularly wrote checks and paid expenses related to the rental properties. Ms. Friedeberg maintained the buildings on the rental properties by providing janitorial services and maintaining the landscape. We find that Ms. Friedeberg did provide various services including management of the properties, maintenance, and janitorial services.
Petitioner introduced Mr. Paul Chahin as an expert witness, and offered his expert report 1998 Tax Ct. Memo LEXIS 309">*334 for the purpose of proving the fair market value of the real estate management and other services provided by Ms. Friedeberg. In his report, Mr. Chahin indicated that his valuation was based on an understanding that Ms. Friedeberg managed the Valencia property and the properties which decedent and Ms. Friedeberg jointly acquired. Mr. Chahin indicated in his report that, based on his experience as a property manager, the property management, leasing, janitorial and maintenance services performed by Ms. Friedeberg had an average fair market value of $24,000 per year.
Mr. Chahin's report did not distinguish between the amount of services provided for each of the different properties based on the number of rental units in each building or otherwise. Mr. Chahin's report did not distinguish a difference in value over the course of 18 years, notwithstanding the fact that more units were acquired over time. The report simply states that the fees charged in general have remained "relatively constant in California since the early 1980's." Also, it is unclear from Mr. Chahin's report which properties the valuation is based on. Mr. Chahin's report does not appear to address the Laidley, South1998 Tax Ct. Memo LEXIS 309">*335 Fitch, or Acadia properties. Because the value assigned by Mr. Chahin is arrived at in a conclusory fashion, without taking into account the changes in the amount of services or the value of the services over time, Mr. Chahin's report does not persuade us that the value of Ms. Friedeberg's services was $24,000 per year, and we are not bound by it.
Even assuming that we accepted a value of $24,000 per year, petitioner has not offered evidence as to which among the various rental properties the value should be allocated or in what proportion. As stated previously, Ms. Friedeberg did credibly testify that she provided regular and substantial services in respect to the rental properties including Valencia and South Fitch. On Form 706, petitioner reported
However, petitioner has not offered any evidence which would persuade us that Ms. Friedeberg performed substantial services in connection with the Laidley or Acadia properties. Petitioner reported no contribution credits on Form 706 for the Laidley and Acadia properties. Although Ms. Friedeberg testified that she regularly cleaned Laidley, she also resided in Laidley with decedent for all the years in which she and decedent lived together. Laidley was never used as a rental property. Also, decedent did not receive any rental income from Acadia subsequent to his divorce from Ms. Fratini. Therefore, based on petitioner's initial allocation on Form 706 of 100 percent of the value of both Laidley and Acadia and because petitioner did not provide us with sufficient evidence in order to allocate any of Ms. Friedeberg's services to either1998 Tax Ct. Memo LEXIS 309">*337 the Laidley or Acadia properties, we find that petitioner has failed to carry the burden of proving that adequate consideration in money's worth was contributed by Ms. Friedeberg to the joint interests in the Laidley or Acadia properties.
With respect to the remaining assets, petitioner argues that the estate is entitled to deduct one-half of the date-of-death value of two checking accounts containing $29,724, 10 a savings account containing $5,214, and a CD valued at $100,000.
Generally, income produced by property belongs to the person who owns the property at the time the property produces such income and does not originate with a donor who has made a completed gift of that property prior to the production of such income.
As we previously stated, the Dolores, Chenery, and Onondaga properties were jointly purchased and owned equally by decedent and Ms. Friedeberg. On or about December 10, 1987, decedent transferred an undivided one-half joint tenancy interest in each of the remaining properties including Laidley, Valencia, South Fitch, and Acadia to Ms. Friedeberg. From 1988 through 1991, decedent and Ms. Friedeberg reported $325,831.67 11 of net rental income from all the jointly held properties.
1998 Tax Ct. Memo LEXIS 309">*339 Ms. Friedeberg testified that amounts received through rental of the properties were equally shared and deposited in the jointly owned bank accounts and were used regularly to purchase CD's. For the time period after December 10, 1987, decedent and Ms. Friedeberg, as joint owners of the properties, equally shared the net rentals. Again, we accept the veracity of Ms. Friedeberg's testimony and find that the rental income received and deposited into joint accounts constitutes sufficient consideration such that Ms. Friedeberg acquired a 50-percent ownership interest in the bank accounts and CD deposits as of the date of decedent's death. Therefore, we hold that petitioner is due a contribution credit pursuant to
FRACTIONAL INTEREST DISCOUNTS
In determining the amount included in decedent's estate pursuant to
In our recent opinion in
Under the scheme of
Applying the same reasoning to the instant case, we conclude that petitioner is not entitled to fractional interest discounts on any of the properties based on joint ownership with Ms. Friedeberg.
On Schedule K of Form 706, petitioner claimed deductions related to mortgages on the Dolores and Onondaga properties of $42,607 and $70,969, respectively. Petitioner allocated the mortgages on the properties in amounts equal to the
Both decedent and Ms. Friedeberg signed the note and deed of trust securing the note for the Dolores property. Similarly, both decedent and Ms. Friedeberg signed the promissory note as part of the purchase of the Onondaga property. Petitioner does not argue that under California law the estate is ultimately obligated to pay more than one-half of the outstanding date-of-death mortgage balances upon the Dolores and Onondaga properties. Therefore, we sustain respondent's determination that petitioner is entitled to deduct 50 percent of the date-of-death balances of the mortgages related to the Dolores and Onondaga properties.
Decision will be entered under Rule 155.
1. Unless otherwise indicated, all section references are to the Internal Revenue Code in effect as of the date of decedent's death, and all Rule references are to the Tax Court Rules of Practice and Procedure.↩
2. It is unclear whether incident to her divorce Ms. Fratini deeded her one-half interest in South Fitch to decedent prior to decedent's transferring a one-half joint tenancy in South Fitch to Ms. Friedeberg. Because the parties agree on the fair market value of the South Fitch property, we need not address this issue.↩
3. It is not clear whether the account from which the $100 was drawn was a joint account; decedent's name appears at the top of the check, and Ms. Friedeberg signed the check.↩
4. Although these amounts were not directly listed on Schedule E, the amounts were calculated and added to the table as a mathematical computation, using the value on the return divided by the fractional discount and divided by the
5. Throughout this opinion, we shall refer to both decedent's estate and Ms. Friedeberg, in her capacity as personal representative of the estate, as petitioner.↩
6. In 1976, subsec. (b) of
7. The summary schedule shows the following payments:
Year | Amount |
1974 | $ 989.01 |
1975 | 1,678.64 |
1976 | 1,551.11 |
1977 | 1,809.42 |
1978 | 2,544.75 |
1979 | 2,967.07 |
1980 | 3,152.23 |
1981 | 2,378.02 |
1982 | 2,290.68 |
1983 | 2,509.46 |
1984 | 2,225.48 |
1985 | 2,284.25 |
1986 | 3,147.08 |
1987 | 3,907.18 |
1988 | 4,048.30 |
1989 | 3,851.66 |
1990 | 7,267.10 |
1991 | 6,284.71 |
1992 | 2,334.00 |
Total | $ 57,220.15 |
8. This amount includes $15,000 from Ms. Friedeberg's divorce, a $4,000 contribution, $10,000 from the CD purchased with German restitution funds, $29,177 from the estate of Lucian Lubinski, and $13,685 from the estate of Hirtha Gray.↩
9. One-half of $139,173.64 equals $69,586.82.↩
10. The first checking account contained $26,244, and the second checking account contained $3,480.↩
11. Net profits from rentals were reported as follows:
Year | Amount |
1988 | $ 46,406.49 |
1989 | 68,744.73 |
1990 | 89,085.41 |
1991 | 121,595.04 |
Total | $ 325,831.67 |