- 45 -
sort of functioning business enterprise that could potentially
inject intangibles that would lift the situation beyond mere
recycling. Cf. Estate of Harrison v. Commissioner, T.C. Memo.
1987-8; Church v. United States, 85 AFTR 2d 2000-804, 2000-1 USTC
par. 60,369 (W.D. Tex. 2000), affd. without published opinion 268
F.3d 1063 (5th Cir. 2001) (both involving contributions by other
participants not de minimis in nature, for a genuine pooling of
interests). We therefore hold that decedent did not engage in
any transfer for consideration upon the creation and funding of
SFLP and Stranco. Accordingly, the estate is entitled to no
exception to the treatment mandated by section 2036(a).
II. Amount Includable
With respect to the amount includable in decedent’s gross
estate on account of a retained interest, the estate makes the
following assertion:
I.R.C. sec. 2036(a) only requires inclusion of property
in a decedent’s estate to the extent that the decedent
retained an interest in the transferred property.
Assuming arguendo that Decedent did retain an interest
in some of the property transferred to SFLP, I.R.C.
sec. 2036 does not automatically require inclusion of
all of the property transferred by Decedent to SFLP and
Respondent has not sustained his burden of proof of
establishing the extent, if any, of any retained
interest.
The foregoing premise, however, rests on a faulty understanding
of the statute’s operation. As we recently explained in Estate
of Thompson v. Commissioner, supra:
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