Opinion ID: 3010070
Heading Depth: 4
Heading Rank: 1

Heading: In general. A decedent's gross estate

Text: includes under section 2036 the value of any interestin property transferred by the decedent . . . except to the extent that the transfer was for an adequate and full consideration in money or money's worth if the decedent retained or reserved (1) for his life . . .
other enjoyment of the transferred property, . . . Appellant refers us to the emphasized words interest and transferred in § 20.2036-1(a) and argues that adequate and full consideration must be measured against the interest transferred. The Commissioner, on the other hand, looks at the phrase of the transferred property in § 20.2036-1(a)(i) and concludes that, because one cannot retain any lifetime interest in a remainder, property must refer to the fee simple interest. The regulation, unfortunately, is not exactingly drafted and does not parse cleanly under either party's interpretation. The Commissioner is of course correct that one cannot enjoy any sort of life interest in a remainder. On the other hand, appellant validly asks why, if the drafters of the regulation meant to include the full value of the property, they referred to the value of any interest in property transferred. On balance, we believe that, if some words of the regulation must be construed as surplusage, it is more reasonable and faithful to the statutory text to render inoperative the word transferred in § 20.2036-1(a)(i) than it would be to strike interest in the first part of the section. We think it is likely that, although the choice of verbiage was less than precise, the drafters meant merely to refer to the transferred property so as to distinguish it from other property owned by the estate. It strains the judicial imagination, however, to conclude that the drafters used the term of art interest in property when they meant simply property.