- 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 itPage: Previous 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 Next
Last modified: May 25, 2011