Estate of Rose D' Ambrosio, Deceased, Vita D'Ambrosio, Executrix - Page 6

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          and 2002.  A decedent's gross estate is determined by reference             
          to part III of chapter 11.  Under this part, the value of the               
          gross estate includes the value of all property to the extent of            
          the decedent's interest therein on the date of death.5  Sec.                
               A decedent's gross estate also includes property that is               
          subject to section 2036(a), which applies when a decedent makes             
          an inter vivos transfer of property without adequate and full               
          consideration and reserves an income interest in the property for           
          life.  Section 2036(a) provides:                                            
                    General Rule.--The value of the gross estate shall                
               include the value of all property to the extent of any                 
               interest therein of which the decedent has at any time                 
               made a transfer (except in case of a bona fide sale for                
               an adequate and full consideration in money or money's                 
               worth), by trust or otherwise, under which he has                      
               retained for his life * * *                                            
                    (1) the possession or enjoyment of, or the                        
                    right to the income from, the property * * *                      
               Respondent argues that section 2036(a) requires that                   
          Decedent's gross estate include the value of 470 shares of Vaparo           
          preferred stock, less the value of Decedent's annuity.                      
          Respondent argues that the "bona fide sale for adequate and full            
          consideration" exception of section 2036(a) is inapplicable to              
          the facts at hand because Decedent received consideration only              

          5 This valuation is usually made at the time of death.  The                 
          executor, however, may elect to value a decedent's property as of           
          an alternate valuation date, e.g., 6 months after death.  Sec.              

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