- 73 -
caselaw referenced above, the adequate and full consideration
exception does not apply where a difference in value between
transferred and received properties causes a depletion in the
transferor’s gross estate. Nor does Kimbell v. United States,
supra, hold otherwise. As the Thompson majority observed as to
Kimbell:
Kimbell does not take into account that to avoid the
recapture provision of section 2036(a) the property
transferred must be replaced by property of equal value
that could be exposed to inclusion in the decedent’s
gross estate * * * on a money or money’s worth basis.
[Estate of Thompson v. Commissioner, supra at 387 n.24
(Greenberg, J., concurring and joined by Rosenn, J.);
citations and quotation marks omitted.]
2. Majority’s Conclusion That the Record Establishes
the Existence of a Legitimate and Significant Nontax Reason
for Creating a Family Limited Partnership
Where the transferors received family limited partnership
interests proportionate to the value of property transferred to
the partnership, the majority concludes that the adequate and
full consideration exception is satisfied if there was a
legitimate and significant nontax reason for creating the
partnership. I disagree with this conclusion for three reasons.
First, I disagree with the use of the majority’s “legitimate
and significant nontax reason” test. See majority op. p. 39. I
would apply the longstanding and well-known business purpose test
of Gregory v. Helvering, 293 U.S. 465 (1935). Indeed, the Court
of Appeals for the Third Circuit used that business purpose test
in Estate of Thompson v. Commissioner, supra at 383, when it
Page: Previous 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 NextLast modified: May 25, 2011