-33-
parties dispute whether section 2036(a)(1) applies to the
transferred assets. In relevant part, section 2036(a)(1)
provides:
SEC. 2036. TRANSFERS WITH RETAINED LIFE ESTATE.
(a) General Rule. The value of the gross estate
shall include the value of all property to the extent
of any interest therein of which the decedent has at
any time made a transfer (except in case of a bona fide
sale for an adequate and full consideration in money or
money’s worth), by trust or otherwise, under which he
has retained for his life or for any period not
ascertainable without reference to his death or for any
period which does not in fact end before his death–-
(1) the possession or enjoyment of, or
the right to income from, the property * * *
Congress enacted section 2036 intending to bring within a
decedent’s gross estate “transfers that are essentially
testamentary–-i.e., transfers which leave the transferor a
significant interest in or control over the property transferred
during his lifetime.” United States v. Estate of Grace, 395 U.S.
316, 320 (1969); see also Estate of Strangi v. Commissioner,
417 F.3d 468, 476 (5th Cir. 2005) (citing Estate of Lumpkin v.
Commissioner, 474 F.2d 1092, 1097 (5th Cir. 1973), vacating
56 T.C. 815 (1971)), affg. T.C. Memo. 2003-145. Under section
2036(a)(1), decedent’s gross estate will include the fair market
value of the transferred assets to the extent that decedent
retained possession or enjoyment of the assets for her life or
for any other period that does not end before her death. Section
2036(a) “describes a broad scheme of inclusion in the gross
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