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death; and (3) the decedent’s transfer was not a bona fide sale
for adequate and full consideration in money or money’s worth.
The parties do not dispute that Austin and Edna made an inter
vivos transfer of property when they contributed the assets to
KPLP. Therefore, we conclude that this requirement is met.
A. Retention of Rights in Transferred Property
Section 2036 requires the inclusion of the value of
transferred property with respect to which a decedent retained,
by express or implied agreement, possession, enjoyment, or the
right to income. Respondent argues that Austin and Edna
retained, by express and implied agreement, until they died, the
enjoyment of the assets they transferred to KPLP. The estate
argues that Austin and Edna retained no rights with respect to
the transferred property and that no agreement, express or
implied, existed.
We agree with respondent that an implied agreement existed
between Austin, on his own behalf and on behalf of Edna, and the
four Korby sons that after the assets were transferred to KPLP,
income from the assets would continue to be available to Austin
and Edna for as long as they needed income.7 In 1995, when
Austin and Edna transferred $1,888,704 worth of assets to KPLP,
7Because we find an implied agreement, we need not decide
whether an express agreement existed that gave Austin and Edna
the possession of, enjoyment of, or right to income from the
transferred assets.
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