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bargaining or negotiating because the seller and the purchaser
were the same person. Cf. Estate of Stone v. Commissioner, supra
(transfers to family partnerships were arm’s-length transactions
because each member of family was represented by independent
counsel and transfers were motivated primarily by investment and
business concerns).
Decedent’s transfer also was not made for full and adequate
consideration. Decedent’s receipt of a partnership interest is
not full and adequate consideration within the meaning of section
2036 because decedent used GFLP merely as a vehicle for changing
the form in which she held her interest in the Marital Fund
assets. See Estate of Thompson v. Commissioner, T.C. Memo. 2002-
246. Decedent’s transfer represents a circuitous “recycling of
value” because no change was made to the underlying pool of
assets; no one other than decedent made contributions of property
or services in the interest of true joint ownership or
enterprise. See Estate of Harper v. Commissioner, supra. The
value of decedent’s interest in GFLP is derived exclusively from
the assets that decedent allegedly contributed to GFLP. Under
these facts, decedent did not engage in any bona fide transaction
for consideration upon the creation and funding of GFLP.
Accordingly, petitioner is not entitled to rely on the exception
under section 2036(a).
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Last modified: November 10, 2007