Estate of Eleanor T.R. Trotter - Page 9




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               Given the language used in the above-quoted provisions, it             
          has long been recognized that section 2036 “describes a broad               
          scheme of inclusion in the gross estate, not limited by the form            
          of the transaction, but concerned with all inter vivos transfers            
          where outright disposition of the property is delayed until the             
          transferor’s death.”  Guynn v. United States, 437 F.2d 1148, 1150           
          (4th Cir. 1971).  Accordingly, courts have emphasized that                  
          section 2036(a)(1) is phrased in the alternative, such that                 
          inclusion is mandated, absent full consideration, if the                    
          transferor retained either actual “possession or enjoyment” or a            
          “right to the income”.  Estate of McNichol v. Commissioner, 265             
          F.2d 667, 670 (3d Cir. 1959), affg. 29 T.C. 1179 (1958); Estate             
          of Honigman v. Commissioner, 66 T.C. 1080, 1082 (1976).                     
               As used in section 2036(a)(1), the term “enjoyment” has been           
          described as “synonymous with substantial present economic                  
          benefit.”  Estate of McNichol v. Commissioner, supra at 671.  In            
          the context of real property, “‘possession’ and ‘enjoyment’ have            
          been interpreted to mean ‘the lifetime use of the property.’”               
          Estate of Maxwell v. Commissioner, 3 F.3d 591, 593 (2d Cir.                 
          1993)(quoting United States v. Byrum, 408 U.S. 125, 147 (1972)),            
          affg. 98 T.C. 594 (1992).                                                   
               Such possession or enjoyment of transferred property is                
          retained for purposes of section 2036(a)(1) where there is an               
          express or implied understanding to that effect among the parties           






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