Estate of Virginia A. Bigelow, Deceased, Franklin T. Bigelow, Jr., Executor - Page 2

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          1993.  Decedent’s trust and decedent’s children formed a family             
          limited partnership in 1994 when decedent was about age 85 and a            
          few months after she suffered a stroke and began living in an               
          assisted-living facility.  Decedent’s trust transferred the real            
          property, but not the liability for a loan and a line of credit             
          totaling $450,000 which were secured by the property, to the                
          partnership.  After the transfer, decedent was left with an                 
          insufficient amount of income to meet her living expenses or to             
          satisfy her liability for the indebtedness.  Decedent’s sole                
          purposes in establishing the family limited partnership were to             
          facilitate gift giving and to reduce Federal estate tax.                    
               The issue for decision is whether the real property that               
          decedent’s trust transferred to the partnership is included in              
          decedent’s gross estate under section 2036(a)(1).  We hold that             
          it is.1                                                                     
               Unless otherwise specified, section references are to the              
          Internal Revenue Code in effect for the time of decedent’s death            
          in 1997, and Rule references are to the Tax Court Rules of                  
          Practice and Procedure.                                                     




               1 In an amendment to the answer, respondent asserted that              
          the property is also includable in decedent’s estate under secs.            
          2036(a)(2) and 2038(a)(1).  Because we hold that the property               
          transferred to the partnership is included in decedent’s estate             
          under sec. 2036(a)(1), we need not decide whether the property is           
          included in decedent’s estate under sec. 2036(a)(2) or sec. 2038.           




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