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that decedent used much less than 76 percent of parcel 3 and the
main house.6 Petitioner also points to Dean’s testimony to the
effect that no agreement existed, implied or otherwise, for
decedent to retain the possession and enjoyment of the partial
interests at the time she transferred those interests to her
children. Respondent argues that Dean’s testimony is self-
serving and contrary to the objective facts and circumstances.
Although Dean’s testimony was clearly self-serving, we disagree
with the assertion that the testimony was contrary to the
objective facts and circumstances, and we ultimately agree with
petitioner that decedent did not retain a life estate includable
in her gross estate under section 2036.
A decedent's reservation of a life interest need not be
provided for expressly in the instrument of transfer or
enforceable under local law to be includable under section 2036.
See Estate of McNichol v. Commissioner, 29 T.C. 1179 (1958),
affd. 265 F.2d 667 (3d Cir. 1959). An implied agreement at the
time of transfer for the decedent to continue possession or
enjoyment of the property is sufficient and may be inferred from
all the circumstances surrounding the transfer. See Guynn v.
6Petitioner's argument implies that decedent owned 76
percent of the homestead property. However, the parties
stipulated that decedent owned 51 percent. At trial, Dean
testified that his father's testamentary trust owned the
remaining 25 percent.
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