Estate of Morton B. Harper, Deceased, Michael A. Harper, Executor - Page 19

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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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