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his wife created a substantially identical trust for his benefit.
In holding that for Federal estate tax purposes each settlor will
be considered the creator of the trust that is in form created by
the other, the Supreme Court stated:
It is undisputed that the two trusts are interrelated.
They are substantially identical in terms and were
created at approximately the same time. Indeed, they
were part of a single transaction designed and carried
out by decedent. It is also clear that the transfers
in trust left each party, to the extent of mutual
value, in the same objective position as before.
Indeed, it appears, as would be expected in transfers
between husband and wife, that the effective position
of each party vis-a-vis the property did not change at
all. It is no answer that the transferred properties
were different in character. For purposes of the
estate tax, we think that economic value is the only
workable criterion. [Id. at 325.]
In the instant case, the transfers were not made in trust;
however, that is a distinction without a difference. "The law
searches out the reality and is not concerned with the form."
Lehman v. Commissioner, 109 F.2d 99, 100 (2d Cir. 1940), affg. 39
B.T.A. 17 (1939); see also United States v. Estate of Grace,
supra at 321. Thus, the same principle and much of the same
factors of the reciprocal trust doctrine are considered in the
reciprocal transaction doctrine, which applies to reciprocal
indirect transfers of a present interest.
For instance, in Furst v. Commissioner, T.C. Memo. 1962-221,
this Court found that where six donors each made transfers of
shares of stock to members of his or her immediate family, and
transfers of the same stock in the same amounts to members of
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