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contributed marketable securities to the partnerships, but the
partnerships failed to sell or diversify them. Other than
favorable estate tax treatment resulting from this change in
form, the court was unable to identify a legitimate and
significant nontax reason for the transfer. See id. at 380. The
court therefore held that there was no adequate consideration
within the meaning of section 2036(a).
The Court of Appeals also concluded that the decedent’s
transfers to the family limited partnerships did not constitute
bona fide sales within the meaning of section 2036(a). The Third
Circuit noted that it is important to scrutinize the substance of
an intrafamily transaction because “‘the family relationship
often makes it possible for one to shift tax incidence by surface
changes of ownership without disturbing in the least his dominion
and control over the subject of the gift or the purposes for
which the income from the property is used.’” Id. at 382
(quoting Commissioner v. Culbertson, 337 U.S. 733 (1949)).
C. Decedent’s Transfer of Empak Stock to WCB Holdings
Respondent contends that decedent’s transfer of Empak stock
to WCB Holdings was not a bona fide sale for adequate and full
consideration in money or money’s worth. The estate’s position
is that decedent’s transfer of Empak stock to WCB Holdings was a
bona fide sale for adequate and full consideration. As stated
above, a finding to that effect would preclude the application of
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