Estate of Rose D' Ambrosio, Deceased, Vita D'Ambrosio, Executrix - Page 7

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          for her remainder interest in the stock.  According to the                  
          executrix, Decedent's gross estate does not include the value of            
          any Vaparo preferred stock because, during her life, she sold the           
          remainder interest in the stock for adequate and full                       
          consideration.  The executrix argues that Gradow v. United                  
          States, 11 Cl. Ct. 808 (1987), affd. 897 F.2d 516 (Fed. Cir.                
          1990), the holding of which is contrary to her position, was                
          wrongly decided by both the United States Claims Court and the              
          Court of Appeals for the Federal Circuit.                                   
               According to the executrix' interpretation, section 2036(a)            
          permits a taxpayer to remove the entire value of property from              
          his or her gross estate by selling the remainder interest in the            
          property for an amount equal to the value of the remainder                  
          interest.  We do not agree.  See Estate of Gregory v.                       
          Commissioner, 39 T.C. 1012 (1963).  We do not believe that the              
          bona fide sale exception of section 2036(a) allows Decedent's               
          estate to avoid the Federal estate tax on the value of the                  
          preferred stock in which Decedent retained an income interest               
          until her death.  We find the executrix' reliance on a private              
          letter ruling and technical advice memoranda misplaced.  Sec.               
          6110(b)(1), (j)(3) (private letter rulings and technical advice             
          memoranda are not precedential); Knapp v. Commissioner, 90 T.C.             

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