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exchange for his testamentary assets is not full and adequate
consideration within the meaning of section 2036. In Estate of
Harper v. Commissioner, supra, we rejected the taxpayer’s argument
that the decedent’s receipt of a partnership interest, in exchange
for his trust assets, was a “bona fide sale for an adequate and
full consideration in money or money’s worth”. We observe therein
that in reality, the assets were not invested in a business
enterprise, they were only “recycled”. And where a transaction
involves only the genre of value “recycling” and does not appear to
be motivated primarily by legitimate business concerns, no transfer
for consideration within the meaning of section 2036(a) has taken
place. Id.
In Estate of Harper v. Commissioner, supra, we further
observed that our interpretation of “adequate consideration” for
transfers to family partnerships was consistent with and supported
by our holdings in other cases, including Estate of Reichardt v.
Commissioner, supra, and Estate of Schauerhamer v. Commissioner,
supra.
In contrast to those situations involving “alternative
testamentary vehicles”, we have also addressed cases wherein a
decedent has transferred his or her assets into a valid functioning
business enterprise. In those cases, we generally have found that
the transfer was made for full and adequate consideration. As
such, the decedent’s receipt of income from the enterprise will not
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