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OPINION
Respondent determined that the fair market value of the
residence is includable in decedent’s gross estate under section
2036(a)(1) because decedent until her death retained the
“possession” and “enjoyment” of the residence within the meaning
of that section. Petitioner argues that section 2036(a)(1) does
not apply to this case because decedent paid FRV for her use of
the residence. Petitioner asserts that decedent did not have to
pay FRV for the entire residence because she shared the residence
with the donees and their families and friends, including David
Disbrow’s girlfriend. Petitioner recognizes that the 2000 lease
agreement required rent installment payments of $850 per month
but asserts that this amount was written erroneously into the
agreement. Petitioner asserts that the parties to the 2000 lease
agreement modified the agreement orally to require that decedent
pay monthly rent of $1,333.33, which, petitioner claims, was no
less than the FRV for decedent’s “shared restricted use” of the
residence.
The Federal estate tax is imposed on the transfer of the
taxable estate of every decedent who is a citizen or resident of
the United States. See sec. 2001. Decedent’s taxable estate
equals her gross estate less applicable deductions. See sec.
2051. Decedent’s gross estate includes the fair market value of
all property to the extent provided in sections 2031 through
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