-22-
1999 and died at age 88 after a period of declining health and
physical problems.
Although no one factor is determinative, these facts and
circumstances, when taken together, show that an implied
agreement existed among the parties that Mrs. Erickson retained
the right to possess or enjoy the assets she transferred to the
Partnership. The transaction represents decedent’s daughters’
last-minute efforts to reduce their mother’s estate’s tax
liability while retaining for decedent the ability to use the
assets if she needed them.
B. Bona Fide Sale for Adequate and Full Consideration
Having concluded that Mrs. Erickson implicitly retained the
enjoyment of the assets she transferred to the Partnership, we
must now determine whether the bona fide sale exception of
section 2036 applies. Under the bona fide sale exception,
transfers a decedent makes before death are not included in the
decedent’s gross estate if the transfers are bona fide sales for
adequate and full consideration in money or money’s worth. Sec.
2036(a). We have recently stated that the bona fide sale
exception applies if the record shows that a family limited
partnership was formed for a legitimate and significant nontax
reason and that each transferor received a partnership interest
proportionate to the fair market value of the property
transferred. Estate of Bongard v. Commissioner, 124 T.C. at 118.
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