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argues that Mrs. Erickson retained the possession or enjoyment
of, or the right to the income from, the transferred assets.
Respondent argues, further, that the assets were not transferred
in a bona fide sale for adequate and full consideration. The
estate counters that Mrs. Erickson retained no rights to the
assets once she transferred them to the Partnership and,
alternatively, that the assets were transferred in a bona fide
sale for adequate and full consideration. We shall consider the
parties’ arguments after first addressing the burden of proof.
I. Burden of Proof
The estate orally moved at trial to shift the burden of
proof under section 7491. We took the oral motion under
advisement and now conclude, after carefully reviewing the
record, that we must deny the estate’s motion to shift the burden
of proof.
3(...continued)
transferred to the trusts for Mrs. Erickson’s grandchildren (the
grandchildren’s gifts) under sec. 2035(a) to the extent that the
grandchildren’s gifts severed the interests Mrs. Erickson
retained in her property under sec. 2036. Second, respondent
argues that the gross estate includes the gift tax on the
grandchildren’s gifts pursuant to sec. 2035(b). The estate did
not address either of these issues at trial or on brief, and we
shall treat the estate as having conceded them. See Rybak v.
Commissioner, 91 T.C. 524, 566 (1988). Finally, the parties do
not dispute that the generation-skipping transfer tax under sec.
2601 applies and the amount of this tax will be calculated
pursuant to our decision.
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