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had to be measured against the total value of the property that
she contributed to the trust, and not only against the value of
the remainder interest in the property. Given that the decedent
transferred $243,989 in property to the trust in return for a
life estate worth approximately $143,346, the Court of Appeals
held that the decedent did not receive adequate and full
consideration under section 2036(a). Id. at 13-14; accord
Parker v. United States, 75 AFTR 2d 2509, 95-1 USTC par. 60199
(N.D. Ga. 1995); Pittman v. United States, 878 F. Supp. 833
(E.D.N.C. 1994).
The Court of Appeals for the Tenth Circuit used analogous
reasoning in United States v. Allen, 293 F.2d 916 (10th Cir.
1961). In the Allen case, the decedent set up an inter vivos,
irrevocable trust in which she retained 60 percent of the income
for life, the other 40 percent passing to her two children who
were also the beneficiaries of the remainder interest. Advised
that her retention of the life estate would cause the
attributable part of corpus (valued at approximately $900,000) to
be included in her gross estate for Federal estate tax purposes,
the decedent sold her life interest to her son for $140,000,
which was slightly greater than the $135,000 actuarial value of
the interest. The Commissioner determined that 60 percent of the
corpus, less the $140,000 purchase price, was includable in the
decedent's gross estate. The executors disagreed. According to
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