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trust in accordance with the provisions of the judgment of
divorce, and also in accordance with that judgment approximately
1 month thereafter the trust was funded by the transfer of assets
from Mr. Jackson for the benefit of petitioner, petitioner's
interest in the trust was a transfer of property to a former
spouse incident to divorce.
Respondent contends that because petitioner acquired her
life interest in the trust from Mr. Jackson incident to divorce,
section 1041 requires that petitioner's life interest in the
trust be treated as if she acquired it by gift. Respondent
argues that section 273 applies to disallow the deductions taken
by petitioner in 1991 and 1992 for amortization of her life
interest in the trust.
Petitioner argues that she acquired her life interest in the
trust by purchase and not by gift since she relinquished her
marital rights in exchange for her life interest in the trust.
She therefore contends that section 273 does not prohibit her
deduction of amortization of her life interest in the trust.
Petitioner states that under Alabama law the life interest in the
trust was transferred to her for valuable consideration, the
relinquishment of her marital rights.
In United States v. Davis, 370 U.S. 65 (1962), the Court
held that the transferor spouse recognized gain when he
transferred appreciated property to his spouse in exchange for
her marital rights, and the transferee spouse took a fair-market-
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