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decedent’s gross estate upon either of two alternative theories.
Respondent argues that the partnership lacked economic substance
and should thus be disregarded for transfer tax purposes or,
alternatively, that section 2036(a) applies to include the value
of the contributed property in decedent’s gross estate due to
decedent’s retention of the economic benefit of the assets.
Furthermore, respondent maintains that even if the
partnership is respected and section 2036(a) is found not to
apply, the discounts claimed by the estate with respect to
valuation of the subject partnership interests are excessive,
unsupported, and should not be sustained. Respondent offers and
relies upon the expert reports of John A. Thomson in connection
with this latter argument.
Conversely, the estate emphasizes that HFLP was a duly
organized and operating limited partnership established with the
business purpose of protecting from Lynn’s creditors the assets
that Lynn would receive or inherit from decedent. Hence,
according to the estate, the partnership must be recognized for
tax purposes. Moreover, it is the estate’s position that section
2036(a) has no application here because the Trust unconditionally
transferred the portfolio assets to HFLP, the Trust received
adequate and full consideration for the transfer in the form of a
credit to its capital account, and there existed no express or
implied agreement that decedent would retain a right to control
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