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Transfer Other Than a Bona Fide Sale for an
Adequate and Full Consideration in Money or Money’s Worth
Section 2036(a) excepts from its application any transfer of
property otherwise subject to that section which is “a bona fide
sale for an adequate and full consideration in money or money’s
worth”. The foregoing exception is limited to a transfer of
property where the transferor “has received benefit in full
consideration in a genuine arm’s length transaction”. Estate of
Goetchius v. Commissioner, 17 T.C. 495, 503 (1951).
It is respondent’s position that the respective transfers of
property by Mr. Stone and Ms. Stone to each of the Five Partner-
ships were not bona fide sales for adequate and full consider-
ation in money or money’s worth under section 2036(a). In sup-
port of that position, respondent relies principally on Estate of
Harper v. Commissioner, T.C. Memo. 2002-121.70 According to
respondent, there is no evidence
in the record indicating that Decedents intended to
conduct a joint enterprise for the mutual profit of
their children and themselves * * *.
Further, a transfer is a sale for adequate and
full consideration only if that received in exchange is
“an adequate and full equivalent reducible to a money
value.” Treas. Reg. � 20.2036-1(a) (cross-referencing
Treas. Reg. � 20.2043-1(a)). The average 43-percent
valuation discounts claimed on Decedents’ estate tax
returns, and the stipulated discounts to be applied in
70Respondent also relies on Estate of Reichardt v. Commis-
sioner, 114 T.C. 144 (2000), and Estate of Thompson v. Commis-
sioner, T.C. Memo. 2002-246, which are factually similar to
Estate of Harper v. Commissioner, T.C. Memo. 2002-121.
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