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partnership and was able to withdraw these assets from
partnership at any time), affd. 382 F.3d 367 (3d Cir. 2004);
Estate of Harper v. Commissioner, supra (decedent commingled
funds, distributions were made disproportionately to decedent,
and arrangement possessed testamentary characteristics); Estate
of Schauerhamer v. Commissioner, T.C. Memo. 1997-242 (decedent
transferred a substantial amount of her assets to a partnership
and deposited income from partnership in a personal account that
she used to pay personal and partnership expenses).
Section 2036(a), however, provides for an exception to its
general inclusion rule. Under the exception, where assets are
transferred through a “bona fide sale for an adequate and full
consideration in money or money’s worth”, the value of those
assets is not subject to inclusion under section 2036(a).
Availability of the exception rests on two requirements: (1) An
arm’s-length transaction, and (2) adequate and full
consideration. Estate of Harper v. Commissioner, supra. The
decedent’s receipt of a partnership interest is not a bona fide
sale for full and adequate consideration where an intrafamily
transaction merely attempts to change the form in which the
decedent holds property. Estate of Thompson v. Commissioner,
supra. In addition, the transfer must be motivated by a
legitimate nontax business purpose. See Estate of Bongard v.
Commissioner, 124 T.C. 95, 118 (2005); Estate of Bigelow v.
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