Estate tax; transfer in contemplation of death

QUESTION: Suffering from cancer in all parts of his body which, according to doctors, was impossible to cure because he was already 88 years old, XXX decided to sell for valuable and sufficient consideration and building and the lot on which it was built to his son YYY.

Six (6) months later, XXX died. During the estate settlement proceeding, it was argued by the Commissioner of Internal Revenue (CIR) that the transfer to YYY was in contemplation of death and, perforce, the property thus transferred should still form part of the gross estate of XXX for purposes of estate tax. Should the same be included?

ANSWER: No, the property transferred to YYY should not be included in the gross estate.

For a transfer to be deemed "in contemplation of death," the transfer must be either without consideration or for insufficient consideration. Absent this requisite, the transfer is NOT considered in contemplation of death.

Here, the text of the case clearly states that the property was sold for valuable and sufficient consideration. Hence, for estate tax purposes, it cannot form part of the gross estate.