- 12 - 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 ofPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
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