-35-
591, 593 (2d Cir. 1993), affg. 98 T.C. 594 (1992); Estate of
Reichardt v. Commissioner, 114 T.C. 144, 151 (2000).
Whether there was an understanding or agreement for decedent
to retain possession or enjoyment of the transferred assets is
determined from all of the facts and circumstances surrounding
both the transfer itself and the assets’ subsequent use. See
Estate of Abraham v. Commissioner, supra at 39. We carefully
scrutinize the facts and circumstances of this case because it
involves an intrafamily transaction. See Slappey Drive Indus.
Park v. United States, 561 F.2d 572, 584 n.21 (5th Cir. 1977);
Anderson v. Commissioner, 164 F.2d 870, 873 (7th Cir. 1947),
affg. 5 T.C. 443 (1945); Estate of Maxwell v. Commissioner,
98 T.C. at 602. While intrafamily transactions are not barred by
section 2036(a)(1), we test whether the resulting terms and
conditions of the transfer of decedent’s assets to the LRFLP were
the same as if unrelated parties had engaged in the same
transaction. See Estate of Bongard v. Commissioner, 124 T.C. 95,
123 (2005). Petitioners have the burden of proof as their
counsel acknowledged at trial.
3. Bona Fide Sale for Adequate and Full Consideration
Under a plain reading of section 2036(a), decedent’s gross
estate does not include the value of property transferred in “a
bona fide sale for an adequate and full consideration in money or
money’s worth”. Petitioners argue primarily that the transfer of
Page: Previous 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 NextLast modified: May 25, 2011