Estate of Marie S. Hubberd, Deceased, John B. McNamara, Jr., and Clayborne L. Nettleship, Co-Independent Executors - Page 7

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          question presented by petitioner's motion is whether, at the time           
          of her death, decedent possessed a beneficial interest in the               
          property transferred by Dilworth, assuming for present purposes             
          that the transfers were voidable.                                           
               In Morgan v. Commissioner, 309 U.S. 78, 80 (1940), the                 
          Supreme Court stated:                                                       
               State law creates legal interests and rights.  The                     
               federal revenue acts designate what interests or                       
               rights, so created, shall be taxed. * * *                              
          Relying on these principles, petitioner contends that the value             
          of decedent's Chapote limited partnership interest is not                   
          includable in the value of decedent's gross estate on the ground            
          that, under Texas law, a voidable transfer vests title in the               
          transferee until successfully avoided.  In short, petitioner                
          contends that section 2033 is not applicable insofar as the                 
          disputed transfers were effective to vest legal title in the                
               Petitioner's focus on the transferees' legal title to the              
          disputed property is misplaced.  To the contrary, the question              
          posed under section 2033 is whether the decedent, at the time of            
          her death, possessed a beneficial interest in the property.  If             
          the transfers in question constituted voidable transfers, we are            
          satisfied that the decedent possessed a beneficial interest in              
          the property; i.e., the right to avoid the transfers and regain             
          legal title to the property, within the meaning of section 2033.            

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