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of Lorraine C. Disbrow, Deceased (decedent), is includable in her
gross estate under section 2036(a)(1).1 Decedent gave the
residence to a newly formed, assetless general partnership whose
partners were decedent, her children, and her children-in-law
(i.e., her daughters-in-law and sons-in-law, collectively).
Shortly thereafter, decedent gave all of her interest in the
partnership to the other partners. Decedent continued to live at
the residence until she died, paying the partnership less than
fair rental value (FRV). Respondent determined that the fair
market value of the residence is includable in decedent’s gross
estate because decedent until her death retained the “possession”
and “enjoyment” of the residence within the meaning of section
2036(a)(1). We sustain that determination. We decide this case
as the parties framed it, and we express no opinion on the
validity of the partnership, which, as we find below, conducted
no business and was not operated with an intent to make a profit.
Nor do we consider respondent’s alternative determination that
decedent’s estate is not entitled to annual exclusions from gift
tax pursuant to section 2503(b) because decedent’s gifts were of
a future interest.
1 Unless otherwise indicated, section references are to the
applicable versions of the Internal Revenue Code. Rule
references are to the Tax Court Rules of Practice and Procedure.
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