Estate of Rose D' Ambrosio, Deceased, Vita D'Ambrosio, Executrix - Page 14

                                       - 14 -                                         

          Commissioner v. Wemyss, 324 U.S. 303 (1945); Estate of Gregory v.           
          Commissioner, 39 T.C. at 1016, or by the rules of the law of                
          conveyance, Helvering v. Hallock, supra at 112; see Estate of               
          Hartshorne v. Commissioner, 402 F.2d 592, 595 n.4 (2d Cir. 1968),           
          affg. 48 T.C. 882 (1967); Estate of Frothingham v. Commissioner,            
          60 T.C. 211, 215-216 (1973).  Rather, the consideration received            
          is compared to the value of the property that would have been               
          included in the gross estate if the transfer had not occurred.              
          The bona fide sale exception applies when an interest in property           
          is transferred for sufficient consideration to prevent the                  
          depletion of the transferor's gross estate for Federal estate tax           
          purposes.  See Estate of Gregory v. Commissioner, supra.                    
               In the instant case, we conclude that Decedent's transfer of           
          the remainder interest in her preferred stock does not fall                 
          within the bona fide sale exception of section 2036(a).                     
          Decedent's gross estate would be depleted if the value of the               
          preferred stock, in which she had retained a life interest, was             
          excluded therefrom.  Decedent's transfer of the remainder                   
          interest was of a testamentary nature, made when she was 80 years           
          old to a family-owned corporation in return for an annuity worth            
          more than $1 million less than the stock itself.  Given our                 
          conclusion that Decedent did not receive adequate and full                  
          consideration under section 2036(a) for her 470 shares of Vaparo            
          preferred stock, we hold that her gross estate includes the date            

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next

Last modified: May 25, 2011