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“The general purpose of the statute was to include in a
decedent’s gross estate transfers that are essentially
testamentary--i.e., transfers which leave the transferor
a significant interest in or control over the property
transferred during his lifetime.” * * * By taxing
essentially testamentary transactions, section 2036(a)
prevents “circumvention of federal estate tax by use of
schemes which do not significantly alter lifetime
beneficial enjoyment of property supposedly transferred
by a decedent.” * * * The applicability of section
2036(a), therefore, is not controlled by the “various
niceties of the art of conveyancing,” * * * but is
instead dependent upon “the nature and operative effect
of the transfer,” * * *. As such, the statute operates
to tax transfers of property “that are too much akin to
testamentary dispositions not to be subjected to the same
excise.” * * *
We have applied the aforementioned principles to the creation
of family partnerships. We have often held that section 2036(a)
applies to return to the estate the assets of an elderly and
wealthy individual who had placed the bulk of his or her assets
into a partnership that is controlled by that individual and his
family, while the individual possessed continued use of the assets
so transferred. See Estate of Reichardt v. Commissioner, 114 T.C.
144 (2000); Estate of Harper v. Commissioner, T.C. Memo. 2002-121;
Estate of Schauerhamer v. Commissioner, T.C. Memo. 1997-242.
In light of decedent’s personal situation, the fact that the
contributed property constituted the majority of decedent’s assets,
including nearly all of his investments, the establishment of the
partnerships is far more consistent with an estate plan than with
any sort of arm’s-length joint enterprise between partners. In
summary, we are satisfied that the partnerships were created
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