Featheeson, Judge:
Eespondent determined a deficiency in the estate tax of petitioner in the amount of $22,231.30. The sole issue is what portion, if any, of an inter vivos trust set up for the benefit of the former wife of decedent is includable in his gross estate.
FINDINGS OF FACT
Some of the facts have 'been stipulated and are so found. The stipulation and exhibits thereto are incorporated herein by this reference.
Howard Lee Davis (sometimes hereinafter referred to as decedent) died testate, a resident of Upper Montclair, N.J., on May 9, 1963. lone Davis Jones (hereinafter referred to as Jones), decedent’s daughter, duly qualified as executrix of his estate on June 5, 1963. At the time of filing of the petition in this case, her legal residence was in Montclair, N.J. The estate tax return for the estate of decedent was filed with the district director of internal revenue at Newark, N. J., on August 10,1964.
On October 1, 1902, decedent married lone Tefft Hatch (hereinafter referred to as lone). Decedent and lone had three daughters, Mary Davis Conger ('hereinafter referred to as Mary) ¡bom September 25, 1903; Alma Euth Davis (hereinafter referred to as Alma) bom February 14, 1906, and lone Davis Jones (J ones) bom April 13, 1910.
Decedent was graduated from the Sheffield Scientific School of Yale University in 1899, where he received a bachelor’s degree in engineering. In 1906, he became employed in the engineering department of the New York Telephone Co. On January 1, 1926, decedent was appointed director of Technical Employment and Training by New York Telephone Co., a position which he held until retirement on December 31,1938, at age 61.
Decedent’s salary from New York Telephone Co. ranged from $9,000 per year in 1925 to $11,000 per year in 1938. Upon retirement, decedent received a pension which ranged in amount from $318.09 per month in 1939 to $314.55 per month in 1959. Decedent continued to receive the pension until his death. After retirement decedent became a teacher at the Polytechnic Institute of Brooklyn, where he taught until 1947. His salary there was approximately $5,000 to $6,000 per, year. After 1947, he taught part time at Newark College of Engineering until about 1952.
Decedent was the author of two publications; one, a book written in 1931 entitled “The Young Man in Business,” was published in New York ¡by John Wiley & Sons, Inc., and in London by Chapman & Hall, Ltd., and the other, a pamphlet entitled “Preparation for Seeking Employment,” was published by John Wiley & Sons., Inc., in 1937. Decedent received some royalty income from these publications but the record does not disclose the amount thereof.
Decedent and lone maintained a high standard of living during their marriage. In 1910, they purchased in lone’s name a 13-room, one-family residence in Montclair, N.J., in which they resided until it was sold on March 31, 1936. The house had four bathrooms, three porches, and a large cellar, in addition to its 13 rooms, and was located in a good residential neighborhood. The grounds included a garden and grape arbor. Decedent always employed full-time domestic help, as well as a part-time laundress. From time to time decedent also engaged governesses for his daughters.
Each of decedent’s daughters received a college education, the costs of which were paid by decedent. Decedent also paid the costs of educating a nephew at Yale University. As graduation presents, decedent gave each daughter an extended European vacation.
In 1932, Alma contracted tuberculosis and was treated at Saranac Lake, N.Y. While Alma was away from home receiving treatment, marital difficulties arose between decedent and lone, and in the fall of 1935 they agreed to break up their home.
Following a decision to divorce, extended discussions were held between decedent and lone, some of which were held in the presence of decedent’s daughters (including Alma who returned home in early 1936), relating to the amount of support lone would need after the divorce. It was agreed that lone would require $300 per month for her support. It was also agreed that Alma would live with her mother in New York City.
On March 31, 1936, the house in Montclair, N.J., was sold in contemplation of the divorce. Decedent and lone owned no other real estate, and none was acquired prior to their divorce.
On April 17, 1936, decedent and lone met in an attorney’s office in New York City and executed two documents, one entitled “Articles of Separation” (hereinafter referred to as separation agreement), and the other entitled “Deed of Trust” (hereinafter referred to as trust). Both documents were witnessed by Walter A Peterson and 'Charles B. Hill, and were acknowledged by Warren S. Adams II, a notary public, on. April 17, 1936. At tlie time these documents were executed decedent was 58 years old, lone was 54 years old, and all the children were over 25 years of age.
The separation agreement, after stating that the purpose of the agreement is to confirm the separation and to mate adequate provision for the support and maintenance of the wife, provided in material part, as follows:
.SECOND: Tlie husband shall and will pay to the wife during Ms lifetime or until such time as tMs agreement shall terminate, for her support, sustenance and maintenance, and for her sole and separate use and benefit, the sum of Two thousand and forty dollars per annum, in equal monthly installments of $170.00 each, commencing on the 4th day of July, 1936, and payable on or about the 4th day of each and every month thereafter.
THIRD: The parties hereto, each for himself and herself hereby specifically waives [sic] the right of election to take Ms or her share of the estate of the other as in intestacy, given to him and her by the Decedent Estate Law of the State of New York, in effect September 1,1930, or any right of election given by the Statutes of any other State, and each agrees that the other may freely devise and bequeath any part or all of Ms or her estate by any will or codicil to any will heretofore executed, or which may hereafter be executed by him or her, to such person or persons as he or she may wish; and each of the parties hereto agrees not to seek any right of election in the estate of the other given to him and to her by law.
FOURTH: The wife agrees, in the event of the death of the husband, not to exercise nor to seek to exercise ant [sic] right of dower in any real estate owned by the husband at the time of Ms death.
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SEVENTH: In case the parties hereto are divorced by a court of competent jurisdiction, no provisions for alimony to the wife shall be made in the decree to be entered therein, but this agreement shall survive said divorce and shall continue in full force and effect. If the wife thereafter marries, then and thenceforth from the time of such remarriage the payments provided for 'herein shall cease and terminate, but without prejudice to any act or thing done or right accrued up to the time of such remarriage.
The second of these contemporaneous documents, the trust, was signed by both decedent and lone, and conveyed certain stocks and securities, with an aggregate value on the date of transfer of $26,307.38, to Commercial Trust Co. of New Jersey as trustee. Commercial Trust Co. of New Jersey continued to serve as trustee up to the time of trial. The trust provided in material part, as follows:
SECTION I
Geneeal Purposes
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(e) To pay the entire net income of the trust property to lone Hatch Davis, the Wife, for and during the term of her natural life, and upon her death to pay the entire net income to Alma Ruth Davis, daughter of the Settlor, and in the event that said Alma Ruth Davis be then married or deceased, to pay said entire net income to the Settlor. * * *
SECTION VII
Termination op the Trust
This trust may be terminated during tlie joint lives of the Settlor and the Wife, by a written agreement to that effect, signed by them and delivered to the Trustee. In the event of the termination of the trust by such an agreement, the Trustee shall pay over and deliver the property then contained in said trust fund as agreed upon by the Settlor and the Wife in such agreement terminating the trust. The Settlor reserves the right at any time during the period of this trust to direct the Trustee to pay over all or any part of the trust fund to the Wife, and in the event of such direction the Trustee shall pay over and deliver to the Wife so much of or all of the trust as directed, free from the trust. And in the event of the death of the Settlor, or in the event that he shall have been adjudged a mental incompetent, the Trustee shall pay over all or any part of the trust fund to the Wife on the written request of the Wife and of all of her daughters then living. This trust shall terminate in any event upon the death of the survivor of the Settlor and the Wife, and the Trustee shall then pay over and deliver the property constituting the corpus of the trust to Mary Sargent Davis Conger, Alma Ruth Davis, and lone Tefft Davis Jones, daughters of the Settlor and the Wife, or to the survivors thereof, in equal shares, except that if any of said daughters shall leave issue her surviving, the said issue shall take the share of the daughter so pre-deceasing the survivor of the Settlor and the Wife, per stirpes and not per capita.
SECTION VIII
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The Settlor shall also have the right, by an instrument in writing delivered to the Trustee, at any time and from time to time during the life of the trust and in the event of the death of the Settlor, the Wife and any two daughters of the Settlor and the Wife shall have the right, to alter or modify the terms of the trust hereby established; provided, however, that no such alteration or modification shall deprive the Wife and/or Alma Ruth Davis of her right to receive income; * * *
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In the event that the Settlor shall die before the termination of this trust and the Wife shall have been adjudged a mental incompetent, or in the event that both the Settlor and the Wife shall have been adjudged mental incompetents, the Trustee shall have the right in its sole and uncontrolled discretion to use all or any part of the principal of this trust for the support, maintenance and confort [sic] of the Wife, and the Trustee is specifically charged by the Settlor to see that the Wife receives every care and comfort during the period of her mental incompeteney.
SECTION IX
Laws oe New Jersey To Govern
The trust hereby established shall be deemed a New Jersey Trust and shall in all respects be governed by the laws of the State of New Jersey, and the situs of the trust shall be at all times in the State of New Jersey.
At the time the separation agreement and trust were executed decedent and lone were residents of the State of New Jersey and had been for many years.
Shortly after April 17, 1936, lone went to Eeno, Nev., and there instituted divorce proceedings against decedent. These proceedings culminated in the issuance, on June 4, 1936, of an “absolute and final decree of divorce” by the Second Judicial District Court of the State of Nevada. The divorce decree ratified and confirmed the separation agreement and made no other provision for support and property rights of lone. The divorce decree did not refer to the trust.
Until his death, decedent faithfully paid to lone $170 per month as provided for in the separation agreement. lone also received monthly payments from the trust beginning on July 15, 1936, and continuing after decedent’s death. The payments to lone under the trust constituted all the trust income. The monthly payments varied in amount and as of May 9,1963, the date of decedent’s death, lone had received a total of $44,803.12 from the trust.
After the divorce lone and Alma resided in a New York City hotel. At first Alma was unable to work full time because of her health, although she did work part time. Decedent gave Alma $50 per month to help support her. In 1940, Alma became gainfully employed on a full-time basis and the payments from decedent ceased. lone’s sole income after the divorce was derived from the $170 monthly payments under the separation agreement and the net income from the trust.
Neither lone nor Alma married after lone’s divorce, and they have continued to live together. Decedent subsequently married Ethel Juliette Davis, but she died on February 7,1960. Decedent did not remarry after his second wife’s death.
At the time of trial lone, who was then 85 years of age, was bedridden from a serious stroke and was physically incapable of appearing and testifying in court.
At the date of decedent’s death the value of the assets in the trust was $93,411.25. Petitioner excluded the entire value of the trust from the gross estate. Respondent determined in his notice of deficiency that the entire value of the trust at the date of death was includable in the gross estate under sections 2036 and 2038,1.R.C. 1954.1
Ul/miATE FINDINGS OF FACT
The separation agreement and trust were integrated parts of a larger agreement between decedent and lone which culminated in divorce, the purpose and effect of which was to settle out of court and by agreement the provisions decedent was to make for lone’s support. The trust created for lone, as well as the $170 monthly payments under the separation agreement, were in consideration of her relinquishing her right of support.
The value of lone’s support right, at the time of the divorce, was $300 per month. The commuted, value of her support right over and. above the $170 per month payable under the separation agreement (i.e., $130 per month) was $17,150.35 as of the date of the divorce. Decedent’s transfer of $26,307.38 to the trust was not supported by adequate and full consideration within the meaning of sections 2036 and 2038.
OPINION
This case involves the interaction of Code sections 2036, 2038, and 2043, as applied to a transfer in trust by the decedent in April 1936, immediately prior to his divorce. Under section 2036(a) (1) and (2),2 a decedent’s gross estate includes the value of any property he has transferred in which he retains the right, either alone or in conjunction with any other person, to designate the persons who shall possess or enjoy the property or the income therefrom unless the transfer was for “adequate and full consideration in money or money’s worth.” Section 2038(a) (2) 3 requires the inclusion in the gross estate of all property over the enj oyment of which the decedent held a power to alter or amend (alone or in conjunction with any other person), unless he transferred the property for “adequate and full consideration in money or money’s worth.” Section 2043(a) 4 provides that, if a transfer falling within section 2036, 2038, or certain other sections is made for “a consideration in money or money’s worth” but not “adequate and full consideration,” there shall be included in the gross estate “only the excess of the fair market value at the time of death of the property otherwise to be included on account of such transaction, over the value of the consideration received therefor by the decedent.”
In the notice of deficiency, respondent determined that the full fair market value of the trust assets at the time of decedent’s death in 1963, $93,411.25, was includable in decedent’s gross estate under sections 2036 and 2038. Respondent now contends, in the alternative, that if we should find that the trust was created in consideration of the wife’s reliquinshment of support rights, only a fraction of the property placed in the trust was transferred for consideration, and that section 2043(a) would include the balance in decedent’s estate.
Petitioner concedes that the powers and interests retained by decedent in the trust are sufficient to bring it within the language of sections 2036 and 2038, absent the exception in each section for transfers for adequate and full consideration. Petitioner contends, however, that the entire transfer in trust was supported by “adequate and full consideration” and that, therefore, no part of the trust is includable in decedent’s estate. In the alternative, petitioner contends that only a portion of the trust is includable in decedent’s estate, and advocates a method of valuation differing significantly from respondent’s valuation under section 2043 (a).
The first problem is whether the trust in fact was created as part of the support arrangement. Respondent contends that the separation agreement represented the entire divorce settlement. We believe, however, that the record as a whole clearly supports our finding that the separation agreement and trust were created as parts of the same “transaction” whereby decedent and his wife, lone, settled claims arising from the marriage in anticipation of a subsequent divorce. We have made this finding, notwithstanding the facts that the separation agreement and the trust do not refer to each other, and the divorce decree does not mention the trust.
The record shows that in late 1935 decedent and lone decided, after more than 30 years of marriage, to become divorced. Once this decision was made, family discussions were held concerning what provision was to be made for lone. The family, including decedent, decided that lone should have $300 per month for her support. As a result of these discussions, described in great detail by credible testimony, the family home was sold on March 31, 1936. Thereafter on April 17, 1986, decedent and lone met at the office of an attorney in New York City where the trust and separation agreement were signed 'by both lone and decedent. Both instruments were notarized and witnessed by the same persons. Subsequently lone instituted a divorce action in Nevada and obtained a final divorce on June 4, 1936. The separation agreement, calling for payments of only $170 per month, was obviously insufficient, standing alone, to provide the needed support. These facts, together with the evidence of decedent’s earnings before and after divorce, the standard of living of the parties, and lone’s lack of earning capacity and financial resources, convince us that the trust and separation agreement together — not the separation agreement alone — were intended to provide for lone’s support.
The divorce decree’s failure to mention the trust, in contrast to its specific inclusion of the separation agreement, does not, in our view, militate against our finding that the two instruments constituted parts of the same transaction. Separation agreements are frequently incorporated in divorce decrees as a means of protecting their viability. There may have been several reasons why the trust was not so incorporated. The decedent and lone may have felt that the flexibility provided by the trust, which was subject to amendment and was to be governed by New Jersey law, might have been seriously impaired had the trust been incorporated in the Nevada divorce decree.
We reject respondent’s contention that the income interests in the trust were created solely for the support and benefit of Alma, decedent’s daughter. The provisions of the trust place no restriction upon the use of the income by lone, and they give Alma, then 30 years of age, no rights in the income until lone’s death. True, Alma was then recovering from tuberculosis, but she lived with lone, and decedent gave Alma $50 per month for her support until 1940 when she became gainfully employed on a full-time basis.
The second question is whether the interests or rights relinquished by lone in exchange for the trust and support agreement were the kind of interests or rights that constitute “consideration” within the meaning of sections 2036 and 2038. More specifically, were they the type of marital rights to which section 2043(b) 5 applies?
Decedent and his wife were domiciled in the State of New Jersey at the time the trust and separation agreement were negotiated and executed, and had been domiciliaries thereof for many years. Under the law of New Jersey, as it existed on April 17, 1936, only three rights of monetary value could accrue to a wife by reason of marriage: (1) The right to receive adequate support from her husband, N.J. Stat. Ann. sec. 2A :34-23 and -24 (1952) ; (2) the statutory right of dower (in New Jersey an inchoate right to a one-half life interest in realty owned by the husband during marriage), N.J. Stat. Ann. sec. 3A:35-1 (1952); and (3) the statutory right of quarantine (in New Jersey the right to remain in the deceased husband’s “mansion house” without paying rent until dower is assigned), N.J. Stat. Ann. sec. 3A:35-4 (1952). There was no right in New Jersey to any other statutory share of the deceased husband’s estate. The only election granted a widow was the right to claim dower in lieu of a testamentary bequest of lesser value, N.J. Stat. Ann. sec. 3A :37-l (1952). The statutory rights of dower and quarantine could only come into existence if the husband owned real property during marriage and prior to divorce, in which the wife had not released her right of dower by deed. Block v. P. & G. Realty Co., 96 N.J. Eq. 159, 124 Atl. 372 (1924); In re Flasch, 51 N.J. Super. 1, 143 A. 2d 208 (1958).
Although the separation agreement contained provisions relating to the relinquishment of dower and other statutory rights, no such rights existed at the time the trust and separation agreement were executed. At that time decedent and lone had already sold their residence and decedent did not own any other real estate. Nor did he acquire any prior to the divorce. There was nothing to which the rights of dower and quarantine could attach. lone did not, therefore, receive any consideration for the purported relinquishment of these rights. Thus, under New Jersey law as it existed in 1936, the only right that lone relinquished was her right to support, a present claim against decedent not within the ambit of section 2043(b). Cf. Estate of Hubert Keller, 44 T.C. 851 (1965).
Having determined that the interest relinquished by lone was the type of interest which may constitute “consideration” under sections 2036 and 2038, we must now determine whether it was “adequate and full consideration.” Petitioner contends that the consideration was “adequate and full,” and that, consequently, no part of the value of the trust is includable in decedent’s gross estate, relying on the argument that the value of the right relinquished by lone (her support rights) may be presumed to be the value of what she received in exchange (the rights under both the separation agreement and the trust). Cf. United States v. Davis, 370 U.S. 65 (1962). Respondent contends that the value of lone’s right to support did not exceed $170 per month, the amount she was to receive under the separation agreement, and, for this reason, the full value of the trust estate is includable in decedent’s gross estate.
We do not completely agree with either party on this point. The evidence clearly indicates that lone would not have been able to maintain her accustomed standard of living on $170 per month, and that decedent’s financial position, detailed in our findings, was sufficient to enable him to pay a great deal more. We do not believe that either party to the divorce considered the separation agreement the sole provision for her support or that lone would have agreed to settle her claim to support for $170 per month. The evidence establishes that decedent, his wife, and his mature children engaged in open, candid discussions as to what would comprise adequate support for lone. At the time of trial, neither lone, nor, of course, decedent, could testify as to what amount was determined as proper. However, two of their daughters testified that it was agreed by all concerned that $300 per month was appropriate. Of this amount, $170 per month was to come from the separation agreement and the balance from the trust.
We found the testimony of the two daughters to be clear and straightforward. It was based on firm memory at the time of trial, and a realistic knowledge of lone’s needs and circumstances at the time of the divorce. The total amount of $300 per month is reasonable in light of the family’s standard of living and decedent’s finances, and we believe that the divorce courts of New Jersey would have found this to be a proper amount. We are convinced that the agreement reached by the parties, distilled from the negotiations preceding the divorce, more accurately reflects the value of lone’s support rights than either the separation agreement alone or the expert testimony offered by petitioner as to what the New Jersey courts would have likely awarded lone had she litigated the matter.6
The parties have stipulated that the present value of an annuity of $1 per annum payable at the end of each year to a woman aged 54, just divorced, for her life or until remarriage, using a 4-percent interest factor (the factor used in 1936) is 10.7973. To obtain the value of the right to receive monthly payments, the resulting figure is multiplied by 1.01820. See sec. 81.10(i) (6), Regs. 105. In the present case, lone’s support rights had a value of $130 monthly, in addition to the $170 provided under the support agreement. The value of this right (which was, in fact, the consideration for the trust) is $130X12X10.7973 X 1.0182, or $17,150.35. It follows that decedent’s transfer of securities valued at $26,307.38 as of the date of transfer was not for “adequate and full consideration,” since he could have satisfied his agreed support obligation by the purchase or other creation of an annuity for a lesser amount.
We are left, then, to a consideration of the mechanics of section 2043(a), quoted in footnote 4, supra. The problem lies in the interpretation of the last clause, i.e., “the value of the consideration received therefor by the decedent.” Respondent contends that section 2043 (a) requires only a simple subtraction of the value of lone’s life interest in the trust (computed to be $11,361.89)7 from the fair market value of the trust assets on the date of decedent’s death ($93,411.25). Respondent would have us reach this conclusion on the theory that the value of lone’s life interest in the trust is either equal in fact or presumed to be equal to what decedent received in exchange for creation of the trust, i.e., release of lone’s support rights in excess of $170 per month. Cf. United States v. Davis, supra. Respondent argues that this approach leads to the most reliable valuation of the “consideration received” for the trust. Petitioner contends, on the other hand, that under section 2043(a) the amount included in the gross estate should be calculated by taking the ratio of the amount of the consideration received by decedent ($17,150.35, under our findings) to the value of the total assets transferred, both valued at the time of the transfer ($17,150.35/$26,307.38), and applying that ratio to the value of the trust at decedent’s death ($93,411.25).
In our analysis of the problem under sections 2036 and 2038, we found that the commuted value of the support rights released by lone was $17,150.35. This amount was thus also the “consideration received” by decedent within the meaning of section 2043(a). True, this sum exceeds the value of a life estate for lone in assets worth $26,307.38 as of April 17,1936, as computed by respondent. But lone’s rights under the trust cannot be accurately and fully valued by reference to actuarial tables. Cf. United States v. Righter, 400 F. 2d 344 (C.A. 8, 1968). Under section VII of the trust she acquired a variety of potential benefits: (1) lone and decedent by mutual agreement could terminate the trust and divide the fund; (2) decedent reserved the right to direct the trustee to pay over to lone all or any part of the trust fund free of the trust; and (3) upon decedent’s death or an adjudication that he was mentally incompetent, lone was given the right to request and receive the entire corpus free of the trust provided that each of the three daughters of decedent and lone, then living, joined in the request. While these rights of lone were subject to the exercise of the will of others, they add potential value to her interest in the trust and indicate that an actuarial computation based on life estate tables would not be a reliable guide to the value of what was transferred by decedent.8
We are constrained to agree with respondent, however, that section 2043 (a) requires a simple subtraction of the value of the consideration received as of tlie transfer date from the value of the trust assets as of decedent’s death. Under this interpretation, we recognize that all market appreciation or depreciation following the transfer is reflected in the gross estate. This may produce harsh results either to the estate or to the Treasury in given factual situations. See dissent in United States v. Past, 347 F. 2d 7, 15-18 (C.A. 9, 1965); Helvering v. United States Trust Co., 111 F. 2d 576, 579 (C.A. 2, 1940), certiorari denied 311 U.S. 678 (1940), reversing 39 B.T.A. 783 (1939). However, the difficulty with petitioner’s argument lies in the language of section 2043(a). The section uses the term, “consideration received,” and this seems clearly to refer to the consideration received by the transferor-decedent as of the date of the transfer. Cf. United States v. Righter, supra;9 United States v. Past, supra at 14 fn. 6; Vardell's Estate v. Commissioner, 307 F. 2d 688, 693 (C.A. 5, 1962), reversing on other grounds 35 T.C. 50 (1960); Estate of Lillian B. Gregory, 39 T.C. 1012, 1020-1022 (1963); D. G. McDonald Trust, 19 T.C. 672, 690 (1953), affirmed sub nom. Chase National Bank v. Commissioner, 225 F. 2d 621 (C.A. 8, 1955), certiorari denied 350 U.S. 965 (1956). Moreover, if there is any doubt as to the meaning of the statutory language, such doubt is resolved by section 20.2043-1 (a), Estate Tax Kegs.,10 which interprets “consideration received” to mean “price received by the decedent.” This reference to “price received” plainly directs attention to the value of the consideration at the transfer date rather than its appreciated or depreciated value as of the date of decedent’s death. Taking into account the administrative difficulties inherent in applying the rule advocated by petitioner as well as the language of section 2043(a), the regulation is a reasonable implementation of the statute which must be sustained. Cf. Commissioner v. South Texas Lumber Co., 333 U.S. 496,501 (1948).
Accordingly, we hold that decedent’s gross estate should include $76,260.90 ($93,411.25 minus $17,150.35) to reflect decedent’s retained interest in the trust.
Reviewed by the Court.
Decision will "be entered, under Bule 50.