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deceased, less than 2 years before his death at 85 years old, had
suffered a broken hip that left him unable to climb the stairs of
his residence. As a result he gave approximately $100,000 to two
friends on the understanding that they would use the money to
acquire a residence of which the deceased was entitled to occupy
a portion. The acquired residence was held by the deceased and
his two friends as joint tenants with right of survivorship.
The estate in that case argued that the friends had supplied
some of the monetary consideration to purchase the residence and
that they provided consideration to the deceased in the form of
“care, comfort, and support”. Id. The District Court found that
the deceased had provided all of the monetary consideration and
“that care, comfort, and support to * * * [the deceased] cannot
constitute consideration furnished for the acquisition of the
real estate * * * [because section 20.2040-1(a), Estate Tax
Regs.] requires that the consideration be adequate and full in
money or money’s worth”. Id.
The estate in this case contends that Spaeder does not stand
for the absolute legal principle that the providing of living
accommodations can never be adequate consideration for purposes
of section 2040. In addition, the estate contends that
decedent’s circumstances are factually distinguishable from those
in Spaeder.
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