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that decedent did not retain or have an implied or express
agreement to retain the possession, enjoyment, or right to the
income from the Padaro Lane property after it was transferred to
Spindrift.
1. Whether There Was an Implied Agreement That Decedent
Would Retain the Right to the Income From the Padaro
Lane Property During Her Lifetime
The estate contends that there was no implied agreement for
decedent to retain the right to income from the Padaro Lane
property. We disagree. The Padaro Lane property was generating
monthly rent of $3,500. The taxes and insurance on the property
totaled $1,350. After the partnership was formed, decedent used
$2,000 of the $2,150 net income from the rental of the Padaro
Lane property to make monthly payments on the Great Western loan.
After the AARP/Prudential residential care insurance policy
expired in August 1995, decedent’s expenses exceeded her income
by $2,700. The partnership continued to make the $2,000 payments
on the Great Western loan, and Mr. Bigelow transferred
partnership funds to decedent’s trust to support decedent. No
distributions were made to any other partner before decedent’s
death. Section 2036 applies if a decedent retains the right to
income from the property or if there was an implied agreement to
that effect. Estate of Reichardt v. Commissioner, supra at 153;
Estate of Hillgren v. Commissioner, T.C. Memo. 2004-46; see
Estate of Thompson v. Commissioner, supra at 375. Decedent’s use
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