Estate of Rose D' Ambrosio, Deceased, Vita D'Ambrosio, Executrix - Page 10

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          elected the life interest, with the result that her community               
          property worth approximately $65,000 went into the trust with her           
          husband's share.  The actuarial value of her income interest in             
          her husband's share was approximately $12,000.  The Court held              
          that the decedent's election was a transfer with a retained life            
          estate that was outside of the bona fide sale exception of                  
          section 2036(a).  The Court compared the decedent's life interest           
          in her husband's share against the larger amount that she had               
          placed in trust.  The Court stated:  "The statute excepts only              
          those bona fide sales where the consideration received was of a             
          comparable value which would be includable in the transferor's              
          gross estate."  Id. at 1016.                                                
               Subsequently, in United States v. Past, 347 F.2d 7 (9th Cir.           
          1965), the Court of Appeals for the Ninth Circuit faced a                   
          comparable issue.  In the Past case, pursuant to a divorce                  
          settlement, the community property of the decedent and her                  
          husband was transferred to a trust, in which the decedent                   
          received an income interest for life.  Citing this Court's                  
          opinion in Estate of Gregory v. Commissioner, supra, the Court of           
          Appeals rejected the argument of the decedent's estate that the             
          decedent's transfer to the trust was excepted from section                  
          2036(a) as a bona fide sale for adequate and full consideration.            
          United States v. Past, supra at 12.  Instead the court reasoned             
          that the consideration received by the decedent from the trust              

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