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to meet its liabilities for estate and gift taxes. To obtain the
funds necessary to meet the estate’s obligations, Karen engaged
in two transactions. First, she sold Mrs. Erickson’s home to the
Partnership for $123,500. Second, the Partnership gave Mrs.
Erickson’s estate cash totaling $104,000. The parties
characterized the $104,000 disbursement as a redemption of some
of Mrs. Erickson’s partnership interests.
Respondent’s Examination and Tax Court Proceedings
Respondent examined the estate’s gift tax and estate tax
returns and issued deficiency notices. The estate timely filed
petitions, and the cases were consolidated. The parties have
stipulated the fair market values of the assets Mrs. Erickson
contributed to the Partnership and have stipulated the fair
market values of the partnership interest Mrs. Erickson retained
after making the grandchildren’s gifts of partnership interests.
OPINION
We are asked to decide whether the assets Mrs. Erickson
transferred to the Partnership shortly before she died are
included in her gross estate under section 2036.3 Respondent
3Respondent argues in the alternative that the gross estate
includes the property transferred to the Partnership pursuant to
sec. 2038. We find for respondent under sec. 2036 and therefore
need not address respondent’s argument under sec. 2038.
Respondent also makes two additional arguments in his opening
brief, neither of which the estate addressed on brief. First,
respondent argues that the gross estate includes the partnership
interests that Karen, acting on behalf of Mrs. Erickson,
(continued...)
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