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QTIP trustee’s August 1, 1986, sale of the sole proprietorship
assets to the general partnership. Respondent also determined
that the QTIP trustee’s sale of the sole proprietorship assets to
the general partnership was for less than full and adequate
consideration, giving rise to a $1,052,772 cause of action in
decedent’s favor, and increased her gross estate accordingly.
OPINION
A decedent’s gross estate generally includes the value of
all property interests described in sections 2033 through 2044.
See sec. 2031; sec. 20.2031-1(a), Estate Tax Regs. Under section
2033, all property beneficially owned by the decedent at the time
of death will be included in the gross estate. See sec.
20.2033-1(a), Estate Tax Regs. Section 2044 includes in the
gross estate the value of all qualified terminable interest
property (QTIP); i.e., property in which the decedent had a
qualifying income interest for life and for which a deduction was
allowed to the estate of a predeceased spouse under section
2056(b)(7). Upon the death of the second spouse, the QTIP is
taxed as part of the second spouse's estate. See sec. 2044(c);
sec. 20.2044-1(a), Estate Tax Regs.
Property includable in the gross estate is generally
included at its fair market value at the time of death. See
secs. 2031-2044. Fair market value is the price at which the
property would change hands between a willing buyer and a willing
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