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in 1990, because notwithstanding James and Hilda’s 1986 payment
of $72,000 for legal title to the House, David and Billie Jean at
all times retained their full interest in the House. According
to petitioner, this position is justified because legal title was
transferred for less than fair market value and because David and
Billie Jean retained exclusive use, control, and enjoyment of the
House. For support, petitioner cites section 2036 of the
Internal Revenue Code.
Section 2036(a) provides in relevant part:
The value of the gross estate shall include the
value of all property to the extent of any interest
therein of which the decedent has at any time made a
transfer (except in case of a bona fide sale for an
adequate and full consideration in money or money’s
worth), by trust or otherwise, under which he has
retained for his life or for any period not
ascertainable without reference to his death or for any
period which does not in fact end before his death--
(1) the possession or enjoyment of, or the right
to the income from, the property * * *
Petitioner contends that if either David or Billie Jean had
died during the 1986-90 period, the estate would have been
required to include the value of the House, because David and
Billie Jean retained “the possession or enjoyment” of the House
after the 1986 transaction. Petitioner further contends that if
David and Billie Jean did not effectively transfer the House to
James and Hilda in 1986, James and Hilda could not have
transferred the House back to David and Billie Jean in 1990,
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