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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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