-44-
Commissioner, T.C. Memo. 2005-102; Estate of Harper v.
Commissioner, T.C. Memo. 2002-121.
Sixth, the assets that were contributed to the LRFLP
consisted solely of marketable securities and cash. For the most
part, the assets of the LRFLP appear not to have been traded by
the LRFLP, which, in part, explains the minimal capital gain
income and loss reported by the LRFLP. As the Court of Appeals
for the Third Circuit has suggested, the mere holding of an
untraded portfolio of marketable securities weighs against the
finding of a nontax benefit for a transfer of that portfolio to a
family entity. See Estate of Thompson v. Commissioner, supra at
380. This Court also has agreed with that principle in cases
where, as here, the securities were contributed almost
exclusively by one person. See Estate of Strangi v.
Commissioner, T.C. Memo. 2003-145; Estate of Harper v.
Commissioner, supra.
Seventh, we note decedent’s age and health when the LRFLP
was formed. In 1994, 2 years before the LRFLP agreement was
signed, decedent was suffering from dementia and Alzheimer’s
disease. As of the beginning of 1994, she also had retained a
caretaker to assist her 24 hours a day. The fact that decedent
was 88 years old and in failing health strongly supports our
finding that the transfer of the assets was purely for the
purpose of avoiding Federal estate and gift taxes. Accord Estate
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