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BFLP never attempted to invest or diversify its assets. As a
practical matter, decedent did not receive any benefit beyond
transfer tax savings from placing his WCB Holdings class B
membership units in BFLP. In Estate of Harper v. Commissioner,
T.C. Memo. 2002-121, we found that the decedent only recycled the
value of the property he transferred to the partnership. A
recycling of value has occurred if “all decedent did was to
change the form in which he held his beneficial interest in the
contributed property.” Id. The partnership in Estate of Harper,
like the partnership here, did not establish a different
investment plan with respect to its assets. In this case,
decedent recycled the value of his WCB Holdings class B
membership units by contributing them to BFLP.
Under these facts, decedent’s transfer of WCB Holdings class
B membership units to BFLP did not satisfy the bona fide sale
exception.
III. Whether Decedent Retained a Section 2036(a) Interest in BFLP
Our determination that the bona fide sale exception does not
apply to decedent’s transfer to BFLP does not end the inquiry.
As pertinent here, section 2036(a) includes in a decedent’s gross
estate “all property to the extent of any interest therein” of
which the decedent has made a transfer wherein he “has retained
for his life” either “(1) the possession or enjoyment of, or the
right to the income from, the property, or (2) the right, either
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