- 15 - all of the expenses of the condominium. The grantees gave up their right to use and occupancy in return for the decedent’s agreement to pay all of the expenses and not look to them for contribution. The Agreement was intended to cover only the period of time between the first conveyance and the last conveyance. * * * * * * * In Guynn v United States, 437 F.2d, 71-1 USTC Par. 12,742 (4th Cir. 1971), the decedent, an eighty year old woman, conveyed a residence to her daughter but remained in the residence without an express agreement that entitled her to do so, paid no rent to the grantee, and paid for improvements and certain ex- penses. The decedent’s grantee, her daughter, testi- fied that the decedent’s remaining in the property was not discussed because it was understood by all involved that she would stay in the property until her death. The Fourth Circuit held that the property was included in the estate based on an implied agreement for a retained life estate. In [Estate of] Barlow [v. Commissioner, 55 T.C. 666 (1971)], the decedent and wife conveyed farm prop- erty to their four children, simultaneously leasing the property back for a share of the crops that was found to be fair market rental. The property was not in- cluded in the taxable estate even though for four years the decedent did not actually pay the rent. The Court found that the outright transfer of the property to the children and the lease back were bona fide transac- tions. The forbearance from collecting rent was due to circumstances that arose later and were not contem- plated by the parties at the time of the transaction. The difference between Barlow and Guynn is that in Barlow, as in this case, the decedent really trans- ferred the entire fee without retaining a life estate. Barlow, like the decedent here, was contractually obligated to pay for his continuing use of the prop- erty, no life estate having been reserved under the transfer. Guynn simply remained in possession without paying any quid pro quo because the parties so agreed. She retained a life estate so Section 2036 applied. There was no discussion or paperwork because none was needed. [Reproduced literally.]Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
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