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children opted to join after the substantive decisions had been
made.
Second, full and adequate consideration does not exist
where, as here, there has been merely a “recycling” of value
through partnership or corporate solution. See Estate of
Thompson v. Commissioner, T.C. Memo. 2002-246; Estate of Harper
v. Commissioner, supra; Kimbell v. United States, 244 F. Supp. 2d
700 (N.D. Tex. 2003). As we recently explained in Estate of
Harper v. Commissioner, supra:
to call what occurred here a transfer for consideration
within the meaning of section 2036(a), much less a
transfer for an adequate and full consideration, would
stretch the exception far beyond its intended scope.
In actuality, all decedent did was to change the form
in which he held his beneficial interest in the
contributed property. * * * Without any change
whatsoever in the underlying pool of assets or prospect
for profit, as, for example, where others make
contributions of property or services in the interest
of true joint ownership or enterprise, there exists
nothing but a 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 see no distinction of consequence between the scenario
analyzed in Estate of Harper v. Commissioner, supra, and that of
the present case. Decedent contributed more than 99 percent of
the total property placed in the SFLP/Stranco arrangement and
received back an interest the value of which derived almost
exclusively from the assets he had just assigned. Furthermore,
the SFLP/Stranco arrangement patently fails to qualify as the
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