*174 Decision will be entered under Rule 50.
Held:
1. At the time of decedent's death all of the capital stock of Crown Body & Coach Corporation was jointly owned by the decedent and his son Murillo, with the right of survivorship, and one-half of its fair market value at decedent's death is includible in his gross estate for estate tax purposes.
2. Real property located at 4909 Sunset Boulevard was jointly owned by the decedent and his surviving spouse at the time of his death and is includible in his gross estate to the extent of 84 per cent of its fair market value.
3. Certain personal property, consisting of a bank account and two trust deeds, was jointly owned property of decedent and his surviving spouse at the time of his death, and since no part of the funds was shown to represent compensation for personal services or was the separate property of the surviving spouse the full fair market value thereof, at the time of decedent's death, is includible in his gross estate.
4. One-half the value of three beach properties which were jointly owned by decedent and his surviving spouse, and which they jointly transferred as gifts to certain of their children, is includible in decedent's*175 gross estate as transfers made in contemplation of death within the purview of section 811 (c), I. R. C.
*488 This proceeding involves a deficiency in the Federal estate tax of the Estate of Don Murillo Brockway in the amount of $ 36,146.21. The case was submitted upon documentary evidence and oral testimony. During the hearing certain facts were stipulated in the record and are found accordingly.
The issues presented are: (1) Whether the outstanding common and preferred stock of Crown Body & Coach Corporation was jointly *489 owned by decedent and his son, Murillo M. Brockway, at the date of decedent's death, and, if so owned, whether*176 50 per cent of the value of such property is includible in decedent's gross estate; (2) whether the respondent erred in including in decedent's gross estate 84 per cent of the fair market value of real property at 4909 Sunset Boulevard, returned as jointly owned by the decedent and his surviving spouse at the time of his death; (3) whether the full value of a bank account and two trust deeds, returned as jointly owned property, is includible in the decedent's gross estate, or only one-half of such value; and (4) whether the respondent erred in including the full value of three beach properties as transfers made in contemplation of death.
Petitioner, by amended petition, assigns as error the inclusion of the real property at 4909 Sunset Boulevard in the decedent's gross estate.
FINDINGS OF FACT.
Don M. Brockway, the decedent, died testate on February 17, 1946, at the age of 79. At the time of his death he was a resident of Los Angeles, California. The estate tax return of decedent was filed by the executrix, Ramona B. May, a daughter of the decedent, with the collector of internal revenue for the sixth district of California.
Decedent was survived by his widow, Louise F. Brockway, *177 one daughter and four sons. Decedent's widow died June 19, 1946. The decedent was married to Louise Foss sometime during the year 1895, and during their marriage resided in California, a community property state. Decedent was born May 9, 1866, and his widow approximately four years later.
Issue 1.
In 1904 the decedent organized and operated the Crown Carriage Company as a sole proprietorship. In 1918 Hale Grettenberg acquired a half interest and the business was operated as a partnership under the name of Crown Motor Carriage Company. In 1922 Hagan Barr acquired the Grettenberg interest and the business was incorporated under the name of Crown Body Corporation, Ltd., later changed to Crown Body & Coach Corporation, hereinafter referred to as "Crown." The issued and outstanding stock consisted of 200 shares of common, of which decedent and Barr owned 100 shares each. The corporation engaged in the manufacture and distribution of buses. About 1922 decedent's son Murillo became associated with the company as an employee. Barr died in 1935. On August 26, 1936, decedent acquired on behalf of his son Murillo from Barr's estate the 100 shares standing in the name of Hagan Barr*178 for a cash consideration of $ 8,000.
*490 On December 16, 1936, decedent and his son Murillo, then approximately 37 years of age, executed an agreement providing as follows:
THIS AGREEMENT made and entered into this 16th day of December, A. D. 1936, by and between D. M. BROCKWAY, party of the first part, and M. M. BROCKWAY, party of the second part.
WITNESSETH:
THAT WHEREAS, the parties hereto are father and son and are the owners of all the issued and outstanding stock of the Crown Body Corporation, Ltd., a California corporation; and
WHEREAS, the parties hereto hold two of the three offices on the Board of Directors of said Company, and are respectively President and General Manager, and Vice -President and Sales Manager thereof, and are by reason thereof in full charge and responsible for the conduct and affairs of said business and the success thereof; and
WHEREAS, the efforts of said parties in the discharge of their said duties have successfully carried said Company through the financial crisis of the past few years and have placed it on a sound financial basis, and it is reasonable to anticipate that under their guidance the success will continue, with its resulting*179 direct advantage to the parties hereto; and
WHEREAS, the parties hereto desire that said control and management continue under the guidance of the parties hereto, and the survivor of them, and that the parties hereto, and the survivor of them, participate in and share to the maximum the benefits resulting from their joint and several efforts, and said parties further desire that in the event the said D. M. Brockway should not survive the said M. M. Brockway, that then and in that event provision be made for the care of the widow of the said D. M. Brockway, who is the mother of the said M. M. Brockway, as herein after provided;
NOW, THEREFORE, for and in consideration of the obligations as hereinafter provided, and the mutual benefits to be derived therefrom, it is understood and agreed as follows:
FIRST: That the parties hereto have and do hereby agree that they, and each of them, will sell, transfer and assign unto themselves, as joint tenants, all their respective shares of stock in the Crown Body Corporation, Ltd., a California corporation.
SECOND: That the party of the second part, as further consideration for the transfer of said shares of stock as hereinbefore provided, *180 has and does hereby agree that in the event his mother, Louise F. Brockway, should survive the party of the first part, that then and in that event he will pay to his said mother and/or expend for her use and benefit the sum of Two hundred dollars ($ 200.00) per month, payable monthly or at such other time or in such other convenient manner as may be mutually agreed upon by them, beginning with the date of the death of the party of the first part and continuing during the lifetime of the said Louise F. Brockway.
It is further understood and agreed that the payments to be made to the said Louise F. Brockway as hereinbefore provided shall not be anticipated, encumbered, alienated or in any other manner assigned by her, and she is without power so to do, nor shall such payments be subject to her liabilities or obligations, nor to judgment or other legal process, bankruptcy proceedings or claims of creditors or others.
THIRD: IT IS FURTHER UNDERSTOOD AND AGREED that in the event the parties hereto, or either of them, acquire additional shares of stock in and to the said Crown Body Corporation, Ltd., that they or he, as the case may be, will *491 transfer same to the parties hereto, *181 as joint tenants, and without any other or further consideration than as hereinbefore provided, and will execute any and all documents necessary to effect such transfer and make such shares subject to all the terms and conditions of this agreement as if same were originally included herein.
FOURTH: IT IS FURTHER AGREED AND UNDERSTOOD that the payments as hereinbefore provided to be made by the said party of the second part to the said Louise F. Brockway are for her use and benefit, and that in the event she should survive the said D. M. Brockway and by reason thereof become entitled to said payments, that then and in that event she shall have and be limited to the right to take such action in her own name as may be necessary to enforce said payments or application thereof as hereinbefore in paragraph SECOND provided, as the real party in interest.
IN WITNESS WHEREOF, the parties hereto have hereunto affixed their hands and seals the day and year first above written.
(signed) D. M. Brockway
PARTY OF THE FIRST PART.
(signed) M. M. Brockway
PARTY OF THE SECOND PART.
On December 16, 1936, decedent surrendered certificates aggregating 100 shares of Crown capital stock which he had *182 acquired in 1922, and a new certificate for 100 shares was issued in the name of decedent and his son Murillo, with the right of survivorship. On January 16, 1937, Murillo executed a promissory note in the amount of $ 8,000 to the decedent, to reimburse the decedent for the 100 shares of Crown stock the decedent had acquired from the Barr estate upon behalf of Murillo. The certificates for such 100 shares were surrendered and a new certificate for 100 shares was issued in the name of the decedent and Murillo as joint tenants. Later, Murillo paid to decedent the sum of $ 8,000 and the note was canceled. Subsequently, 550 shares of common stock and 950 shares of preferred stock of Crown were issued in the name of the decedent and Murillo, with the right of survivorship, which were to be paid for equally.
None of the common or preferred shares of Crown issued in the name of the decedent and Murillo as joint tenants was ever sold or transferred prior to decedent's death.
After execution of the agreement of December 16, 1936, the credits to the accounts of the decedent and Murillo for salaries and bonuses were always equal. For the years 1942 to 1945, inclusive, the salary as fixed*183 by the directors was $ 15,000 each and the bonus $ 10,500 each. After 1936 and until decedent's death each Federal income tax return filed by Crown reported its capital stock was owned 100 per cent jointly by the decedent and Murillo. The Federal estate tax return also reported that all of the capital stock of Crown was so held. In such latter return, the capital stock of Crown was reported as having a book value as of December 31, 1945, of $ 315,327.92. The amount reported as includible in decedent's gross estate as the value of decedent's *492 interest was $ 31,163. In determining the deficiency herein the respondent valued the decedent's interest in the Crown stock at $ 157,663.96, or one-half the book value, and increased the amount of $ 31,163, as reported, to the amount of $ 157,663.96.
After the decedent's death his widow and his children, other than his son Murillo, made certain claims against Crown and Murillo as a result of which an agreement entitled "Release" was executed by all the interested parties on April 20, 1946. That agreement contains a detailed recitation of facts embodied in 14 "whereas" paragraphs. Among such recitals, and pertinent to the capital*184 stock of Crown, are the following:
WHEREAS, * * * the said Don M. Brockway was the record holder in his own name of one-half of the then outstanding stock of said Crown Body Corporation, Ltd.; at which time the said Murillo M. Brockway was the owner, in his own right, of the other one-half of the stock of said Corporation; and
WHEREAS, by agreement dated the 16th day of December, 1936, the said Don M. Brockway and Murillo M. Brockway transferred all of the outstanding shares in Crown Body Corporation, Ltd. to themselves as joint tenants, copy of which agreement is hereto attached marked Exhibit "A" and made a part hereof for each and every purpose as if set out herein in full; and
WHEREAS, the said Murillo M. Brockway now claims, by virtue of said agreement made between himself and the said Don M. Brockway, dated December 16, 1936, to be the sole owner, as such surviving joint tenant, of all of the stock of Crown Body & Coach Corp., and has caused said stock, together with the shares hereinafter mentioned, all to be transferred and/or issued to and same now stands of record in his name as such; and
* * * *
WHEREAS, during the years 1941, 1942, 1943, 1944, 1945, and 1946, the said *185 Murillo M. Brockway and the said Don M. Brockway each invested an additional Sixty-two Thousand Five Hundred Dollars ($ 62,500.00) out of their earnings from said Company in certain additional shares of Crown Body & Coach Corp., which shares were likewise issued in joint tenancy to them, and the said Murillo M. Brockway hence claims to likewise be the owner thereof as such surviving joint tenant as hereinbefore mentioned; and
WHEREAS, the said Louise Foss Brockway further maintains that the said additional investment of Sixty-two Thousand Five Hundred Dollars ($ 62,500.00) by Don M. Brockway was made from community funds of the said Don M. Brockway and herself, and was likewise without her knowledge or consent transferred into such joint tenancy; * * *.
As a part of the consideration for the execution of the agreement of release, Murillo covenanted and agreed to pay the decedent's widow the sum of $ 20,000 and undertook to personally pay all Federal estate taxes assessed against the decedent's estate together with any deficiency thereon.
At the time of decedent's death on February 17, 1946, all of the issued capital stock of Crown was held jointly by the decedent and his son Murillo, *186 with the right of survivorship. The amount of $ 157,663.96, representing one-half the value of the Crown stock jointly held, is includible in the decedent's gross estate for Federal estate tax purposes.
*493 Issues 2 and 3.
By a deed dated October 9, 1920, Ella J. Robinson conveyed to Louise F. Brockway lot 13 in block "A" of the Sunset Boulevard Tract recorded in book 7, page 52, of Maps in the office of the County Recorder of the County of Los Angeles, State of California. The recited consideration was $ 10, and the property was subject to a mortgage for $ 1,450 dated September 17, 1920. The deed was a grant deed and bears a $ 2 documentary stamp. The property is known as 4909 Sunset.
On February 6, 1945, decedent and his widow entered into a written agreement to execute mutual wills in which they devised and bequeathed their real and personal property to the survivor. In the event either predeceased the other the real and personal property was devised and bequeathed to their children as in such wills provided. The agreement provided that neither party would revoke, cancel, or amend his or her will without the consent of the other as evidenced by written endorsement*187 thereon to that effect. The agreement contains six "whereas" paragraphs. Pertinent to the issues here is the following:
WHEREAS, the parties hereto have during their said marriage accumulated, become possessed of and now own certain real and personal properties and interests therein, title to which, particularly as regards the real properties described in their wills hereinafter referred to and their bank account, is in their names and owned by them as joint tenants, and as regards their stock interest in the Crown Body & Coach Corp., the same is in the names of and owned by the party of the first part and their said son, Murillo M. Brockway, as joint tenants, in accordance with the terms of an agreement between them; * * *.
In the Federal estate tax return the 4909 Sunset property was returned as jointly owned property of the decedent and his widow at a value of $ 10,000. The amount of $ 8,400 was returned as includible in the decedent's gross estate, and $ 1,600 was returned as the widow's contribution.
In determining his deficiency the respondent valued the property at $ 22,500 and increased the amount includible in decedent's gross estate from $ 8,400 to $ 18,900.
At the time*188 of decedent's death the Sunset property was jointly owned by the decedent and his widow. The value of decedent's interest was not less than the sum of $ 18,900, which amount is includible in the gross estate of decedent.
In the estate tax return the following property was reported as jointly owned by the decedent and his widow at the time of the former's death:
| Bank account | $ 5,047.37 |
| Trust deed November 21, 1944 | 3,000.00 |
| Trust deed September 11, 1943 | 2,111.46 |
*494 The full amounts above set forth were included in decedent's gross estate.
At the time of the decedent's death the bank account and the two trust deeds were jointly owned by the decedent and his widow. The total value of such properties aggregating $ 10,158.83 is includible in decedent's gross estate.
Issue 4.
On September 25, 1945, the decedent and his widow transferred as gifts to four of their children three separate pieces of property, referred to as the beach properties, as follows:
To Foss R. Brockway, son, the Naples property, valued at $ 2,500.
To Ramona B. May, daughter, the Alamitos Bay lot, valued at $ 2,500.
To William W. Brockway and Don C. Brockway, sons, the Seal Beach property, together*189 with the furnishings, etc., the grantors reserving to themselves and the survivor a life estate therein, valued at $ 8,500.
In the mutual wills of the decedent and his widow executed pursuant to the agreement of February 6, 1945, and bearing even date, these same pieces of property were devised and bequeathed to the same children to whom the gifts were made.
On September 25, 1945, concurrently with the date of the transfers, the decedent, with the written consent of his widow, executed a codicil striking from his mutual will the paragraph devising the beach properties to the aforesaid children.
At the time of the transfers on September 25, 1945, the decedent was in good health for a man then over 79 years of age. The estate tax return gives as the cause of his death arteriosclerotic heart disease and the length of his illness from December 6, 1945, to February 17, 1946.
In determining the deficiency the respondent included the three beach properties in decedent's gross estate at the value of $ 13,500 as transfers made in contemplation of death.
At the time the decedent and his widow made gifts of the three beach properties, on September 25, 1945, the properties were jointly owned*190 by them.
Petitioner has failed to establish that the decedent's gifts of his one-half interest in the beach properties of the value of $ 6,750 were not a transfer made in contemplation of death.
OPINION.
The first issue involves the question whether, at decedent's death, all the issued and outstanding shares of the capital stock of Crown were jointly owned by decedent and his son, and, if so, the amount includible in the decedent's gross estate as the value of his interest. At the time of decedent's death there were issued *495 and outstanding in the joint names of the decedent and his son Murillo 750 shares of common and 950 shares of preferred stock. The conceded aggregate book value of the total shares at the critical date was the sum of $ 315,327.92, one-half of which amount the respondent included in decedent's gross estate.
It is the contention of petitioner that, although the Crown stock was registered in the joint names of decedent and his son Murillo, all the stock, in fact, was owned by Murillo, who had acquired the decedent's interest for a full and adequate consideration.
In support of its contention petitioner relies upon the testimony of Murillo, the surviving*191 joint owner. He testified that in executing the agreement of December 16, 1936, providing that the Crown stock was to be registered in the joint names of the decedent and himself, it was the intention of the parties to make use of the form of a joint tenancy to avoid outside interference in the business, and that in substance and reality he, Murillo, was the actual owner of the stock. We are unwilling to accept Murillo's testimony as to the intentions of the parties, in view of the fact that the lips of the decedent have been sealed by death. We do not regard the agreement of December 16, 1936, as ambiguous. That the decedent believed he was a joint owner of the Crown shares is clearly indicated by the statement in the agreement between the decedent and his widow executed on February 6, 1945. The agreement of release, dated April 20, 1945, to which Murillo was a signatory, also recites that the decedent and Murillo were each owners of one-half of the Crown stock.
Furthermore, the conduct of the parties subsequent to the execution of the agreement of December 16, 1936, as disclosed by the corporate minutes and records, the authorization of the payments of equal salaries and bonuses, *192 and the equal charges against the accounts of both the decedent and Murillo for the shares subsequently issued in their joint names, conclusively show, we think, that the true intent of the parties was joint ownership with the right of survivorship.
The record also establishes that Murillo has agreed to pay the estate tax liability of the estate of decedent, and he is, therefore, the only individual financially interested in this proceeding. In the light of such fact, we think the indisputable documentary proof is to be accepted as establishing the ownership of the Crown stock. We conclude that at the time of the decedent's death all the capital stock of Crown was jointly owned by the decedent and his son Murillo.
Has petitioner established that less than one-half the value of the Crown shares should be included in the decedent's gross estate? We think not. Not only was the decedent the owner of one-half the stock at the time the agreement of December 16, 1936, was executed, but the record establishes that one-half of the subsequently issued *496 shares of stock were purchased by credits against the decedent's salary and bonus authorized by the directors.
It is contended *193 by the petitioner that the sum of $ 20,000 which Murillo agreed to pay the decedent's widow under the agreement of release dated April 20, 1946, should be allowed as an offset against the value of decedent's one-half interest. We do not agree. That payment was made pursuant to an agreement made subsequent to decedent's death, and has no bearing on the status of the stock on the date of decedent's death. Whether upon a later sale of the stock by Murillo such payment may be considered in establishing his cost basis we need not now determine. We have, therefore, found as a fact that the amount to be included in the decedent's gross estate for tax purposes is one-half the value of such stock in the amount of $ 157,663.96.
The second and third issues are allied and will be considered together. The second issue involves real property located at 4909 Sunset Boulevard, Los Angeles, California, and the third issue involves a joint bank account and two trust agreements. The market values of the real and personal property are not in dispute. The petitioner contends that the real property was the sole and separate property of the decedent's widow and no part of its value is includible in*194 decedent's gross estate; and, as to the personal property, the contention is that the same was acquired with community funds and only one-half the fair market value thereof is includible in decedent's gross estate.
This record shows that, regardless of the former status of the real and personal property, the decedent and his widow agreed in writing on February 6, 1945, that their real and personal property, exclusive of the Crown stock, was held by them as joint tenants.
In the State of California the law is well settled that a husband and wife may agree with respect to the character of the property which they hold and may transmute their property from one status to another by agreement. In re Watkins' Estate, 16 Cal. 2d 793">16 Cal. 2d 793, 797, 108 P.2d 417">108 P. 2d 417, and authorities therein cited. Under the California code there is a conclusive presumption of the truth of a fact from a recital in a written instrument between the parties thereto. Code Civ. Proc., sec. 1962. We think that by their agreement of February 6, 1945, the decedent and his widow agreed that the status of the Sunset property was jointly owned and that it was so held at the time of*195 his death. In the estate tax return the property was reported as jointly owned, with a claim that the surviving spouse had contributed 16 per cent of its total value. Petitioner has endeavored to establish by the original deed that the property was taken in the name of the surviving spouse and was her separate property. Petitioner did not show the source of the funds from which the property was acquired. The *497 surviving spouse was not living at the time this proceeding was heard, which presumably accounts for petitioner's inability to establish such fact. Since the petitioner has not shown that the contribution of the surviving spouse was in excess of 16 per cent, the respondent's inclusion of the 84 per cent of the value of the Sunset property is sustained.
A similar situation prevails with respect to the joint bank account and the two trust deeds. In the estate tax return this personal property was reported as jointly owned property of the decedent and his widow, and the full value was included in the decedent's gross estate. Petitioner contends that this personal property was acquired with community funds and only one-half the fair market value should be included*196 in the decedent's estate. Petitioner has made no showing as to what part of such funds represented compensation for personal services or was the separate property of the surviving spouse. Therefore, the full value of such personal property was includible in the gross estate of the decedent. Estate of Joseph H. Heidt, 8 T. C. 969, affirmed per curiam, 170 F.2d 1021">170 F. 2d 1021.
The final issue presents the question whether the three parcels of beach property are includible in decedent's gross estate as transfers made in contemplation of death within the purview of section 811 (c) of the Internal Revenue Code. By virtue of the agreement of February 6, 1945, these beach properties were jointly owned by the decedent and his surviving spouse. On September 25, 1945, the decedent and his widow transferred and conveyed these properties to four of their children. We, therefore, consider the question whether transfers of the beach properties were made in contemplation of death. The issue is factual. On the basis of this record we think the answer must be in the affirmative.
At the time of the transfers on September 25, 1945, the decedent*197 was 79 years of age. He died on February 17, 1946, and within the period the statute presumes a transfer to have been made in contemplation of death. While the presumption is not conclusive it places a heavy burden upon the petitioner. This burden, we think, has not been met. With respect to the Seal Beach property conveyed to two of decedent's sons, the deed reserves to the grantors, or the survivor, a life estate. With respect to the Naples property and the Alamitos Bay lot, the deeds were not offered in evidence. The executrix, who was the donee of the Alamitos Bay lot, was ill and unavailable as a witness and the evidence respecting the last two mentioned properties was very meager.
The record establishes that pursuant to a written agreement executed February 6, 1945, wherein the decedent and his widow executed mutual wills, these identical properties were devised to these same children to whom the inter vivos gifts were made. Concurrently with the execution of the deeds of transfer on September 25, *498 1945, the decedent, with the written consent of his widow, the other joint tenant, executed a codicil to his will deleting from his will the paragraphs devising*198 the said beach properties. These circumstances together with the other factors referred to lead us to conclude that the transfers were testamentary in character, and, therefore, made in contemplation of death within the meaning of section 811 (c) of the Code.
Having determined the transfers were made in contemplation of death, the further question arises as to whether the entire or only one-half of the fair market value of such properties is to be included in the decedent's gross estate.
At the time of the gifts of the beach properties to the children of the decedent, such properties were jointly owned by decedent and his surviving spouse and both joined in executing the deeds of transfer.
In the case of Sullivan's Estate v. Commissioner, 175 F.2d 657">175 F. 2d 657, reversing 10 T.C. 961">10 T. C. 961, one of the issues involved was a transfer of jointly owned property by the decedent and his wife to their son which was found to have been made in contemplation of death. The United States Court of Appeals for the Ninth Circuit held that, under California law, applicable to the instant case, one joint tenant cannot sell, convey or dispose of more*199 than his or her undivided half interest, and therefore only one-half of the property transferred was includible in the decedent's gross estate as a transfer in contemplation of death within section 811 (c) of the Internal Revenue Code. In the course of its opinion the Court of Appeals said:
It has long been established that what constitutes an interest in property held by a person within a state is a matter of state law. Fernandez v. Wiener, 326 U.S. 340">326 U.S. 340, 355-357, 66 S. Ct. 178">66 S. Ct. 178, 90 L. Ed. 116">90 L. Ed. 116, determining by Louisiana law what is transferred of community property on the death of the husband and the shiftings of interest between the two spouses. Moffitt v. Kelly, 218 U.S. 400">218 U.S. 400, 31 S. Ct. 79">31 S. Ct. 79, 54 L. Ed. 1086">54 L. Ed. 1086, 30 L. R. A., N. S., 1179.
One of the factors in an owner's interest in property is the owner's power to transfer it. Congress has the power to impose an excise tax on the transfer when made, but has not enacted any law taxing gifts which determines the quantum of the transfer and thereby makes the state law not controlling.
Under the law of California, *200 one joint tenant cannot dispose of anything more than his own interest in the jointly held property. People v. Marshall, 8 Cal. 51">8 Cal. 51; Oberwise v. Poulos, 124 Cal. App. 247">124 Cal. App. 247, 12 P.2d 156">12 P. 2d 156. "During the lives of the tenants, the rules regulating the transfer of their interests are substantially the same, whether they hold in joint tenancy or in common. Neither a joint tenant nor a tenant in common can do any act to the prejudice of his co-tenants in their estate." Stark v. Barrett, 15 Cal. 361">15 Cal. 361, 368. Where a joint tenant has purported to convey more than his interest, his transferee is held to have taken only the interest that could be transferred, i. e., the transferor's share. Stark v. Barrett, supra;Swartzbaugh v. Sampson, 11 Cal. App. 2d 451">11 Cal. App. 2d 451, 54 P.2d 73">54 P. 2d 73.
It is obvious that the half interest conveyed by the wife was not in contemplation of death. She is still living.
The decision of the Tax Court is reversed on the issue of the gift to the son.
*499 We think that the Sullivan*201 case correctly interprets section 811 (c) as including in decedent's gross estate only his one-half interest in the jointly owned property as a transfer in contemplation of death. If this result is contrary to the basic purpose of the estate tax statute and there is a loophole in section 811 (c), the remedy lies with Congress.
We, therefore, hold that only one-half the conceded fair market value of the beach properties is to be included in the decedent's gross estate.
Decision will be entered under Rule 50.