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Mr. Strangi’s assets artificially for a brief time as the assets
passed through his estate to his children. See Estate of Murphy
v. Commissioner, T.C. Memo. 1990-472, in which this Court denied
decedent’s estate a minority discount on a 49.65-percent stock
interest because the prior inter vivos transfer of a 1.76-percent
interest did “not appreciably affect decedent’s beneficial
interest except to reduce Federal transfer taxes.” Estate of
Murphy v. Commissioner, supra, 60 T.C.M. (CCH) 645, 661, 1990
T.C.M. (RIA) par. 90,472, at 90-2261.
Thus, under the end-result test, the formally separate
steps of the transaction (the creation and funding of the
partnership within 2 months of Mr. Strangi’s death, the
substantial outright distributions to the estate and to the
children, and the carving up of the Merrill Lynch account) that
were employed to achieve Mr. Strangi’s testamentary objectives
should be collapsed and viewed as a single integrated
transaction: the transfer at Mr. Strangi’s death of the
underlying assets.
In many cases courts have collapsed multistep transactions
or recast them to identify the parties (usually the donor or
donee) or the property to be valued for transfer tax purposes.
See, e.g., Estate of Bies v. Commissioner, T.C. Memo. 2000-338
(identifying transferors for purposes of gift tax annual
exclusions); Estate of Cidulka v. Commissioner, T.C. Memo. 1996-
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