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circuitous “recycling” of value. We are satisfied that such
instances of pure recycling do not rise to the level of a payment
of consideration. To hold otherwise would open section 2036 to a
myriad of abuses engendered by unilateral paper transformations.
We note that the foregoing interpretation is supported by
our holdings in both Estate of Reichardt v. Commissioner, 114
T.C. 144 (2000), and, by implication, Estate of Schauerhamer v.
Commissioner, T.C. Memo. 1997-242. In Estate of Reichardt v.
Commissioner, supra at 155-156, the taxpayer contended that the
parenthetical exception should apply. We, however, rejected this
argument, observing that neither did the decedent’s children give
anything to him or to the partnership at the time he contributed
his assets nor did he sell the transferred property to the
entity. Id. In Estate of Schauerhamer v. Commissioner, supra,
the contributed assets were included in the decedent’s gross
estate under section 2036(a) without discussion of the exception,
leading to the inference that it would not apply in such
circumstances.
We further are convinced that the cases cited by the estate
do not require a contrary conclusion. The estate points in
particular to Estate of Jones v. Commissioner, 116 T.C. 121
(2001); Estate of Strangi v. Commissioner, 115 T.C. 478 (2000);
Shepherd v. Commissioner, 115 T.C. 376 (2000), affd. 283 F.3d
1258 (11th Cir. 2002); Estate of Harrison v. Commissioner, T.C.
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