Estate of Morton B. Harper, Deceased, Michael A. Harper, Executor - Page 24

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          retained the “use, possession, right to the income, or other                
          enjoyment of the transferred property”.  Sec. 20.2036-1(a)(i),              
          Estate Tax Regs.                                                            
               Given the language used in the above-quoted provisions, it             
          has long been recognized that “The general purpose of this                  
          section is ‘to include in a decedent’s gross estate transfers               
          that are essentially testamentary’ in nature.”  Ray v. United               
          States, 762 F.2d 1361, 1362 (9th Cir. 1985) (quoting United                 
          States v. Estate of Grace, 395 U.S. 316, 320 (1969)).                       
          Accordingly, courts have emphasized that the statute “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).                                                 
               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, 265 F.2d 667, 671            
          (3d Cir. 1959), affg. 29 T.C. 1179 (1958); see also Estate of               
          Reichardt v. Commissioner, 114 T.C. 144, 151 (2000).  Moreover,             
          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 at the               
          time of the transfer, even if the retained interest is not                  

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