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Based upon our examination of the entire record before us,
we find that at the time of Ms. Mirowski’s gifts and at the time
of her death Ms. Mirowski did not retain the possession or the
enjoyment of, or the right to the income from, the 16-percent
interests in MFV that she gave to her daughters’ trusts within
the meaning of section 2036(a)(1).
Right To Designate the Persons Who Shall
Possess or Enjoy the Property Transferred
or the Income From Such Property
It is the position of decedent’s estate that Ms. Mirowski
did not retain a right described in section 2036(a)(2) with
respect to the respective 16-percent interests in MFV that she
gave to her daughters’ trusts.
Respondent counters:
With the approval of the daughters (now the other
interest holders), decedent had the authority to
dispose of assets in other than the ordinary course of
business. [MFV’s operating agreement] Section 5.1.3.1.
As the holder of a majority of the MFV interests,
decedent alone held the power to determine the timing
of the distribution of the capital transaction
proceeds. [MFV’s operating agreement] Section 4.5.1.
Thus, after the transfer of the three 16 percent
interests, decedent held the right, in conjunction with
her daughters, to designate the person or persons who
shall possess or enjoy the proceeds of the transferred
property, within the meaning of section 2036(a)(2),
with the result that the assets transferred to MFV are
includible in the gross estate. * * *
Before addressing the linchpin in respondent’s argument
under section 2036(a)(2), we reject respondent’s contention that
Ms. Mirowski’s daughters were members of MFV after Ms. Mirowski’s
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Last modified: March 27, 2008