[Emphasis added.]

This section is phrased in the alternative and requires property to be included in the decedent's estate if she retained the actual possession or enjoyment thereof, regardless of whether she had any enforceable right to do so. Possession or enjoyment is retained under a gift when there is an express or implied understanding to that effect among the parties at the time of the transfer. Guynn v. United States, 437 F.2d 1148">437 F.2d 1148 (4th Cir. 1971); Estate of Francis M. Hendry, 62 T.C. 861">62 T.C. 861 (1974);1976 U.S. Tax Ct. LEXIS 45">*50 Estate of Emil Linderme, Sr., 52 T.C. 305">52 T.C. 305 (1969). Although decedent's daughter testified that the decision to sell the house was taken after the gift, the evidence shows that these events must have been virtually simultaneous. The daughter and son-in-law contracted to buy a new residence just 8 days after the gift. At that time there was an express understanding that decedent would continue to occupy the old residence until living quarters were available in the new house. In any event, we conclude that there was at least an implied understanding at the time of the gift that decedent would live in the house until her daughter sold it. Petitioner attempts to avoid the impact of these facts by arguing that decedent's continued occupancy was solely for her daughter's benefit, i.e., to protect against vandalism and to assist in selling the property. Arguably such occupancy would not amount to a "retention" of possession or enjoyment by decedent; ² but we are convinced by all the evidence that any benefits flowing to decedent's daughter were only peripheral consideration for decedent's continuing to live on the premises. Decedent's daughter never sought1976 U.S. Tax Ct. LEXIS 45">*51 to occupy the property; the 66 T.C. 1080">*1083 only use she ever intended to put it to was to sell it. All parties intended that until a sale occurred decedent would make her home and place of business there just as she had previously. Obviously this intention arose from practicality, affection, and common decency and would not have vanished in the absence of any incidental benefit to the daughter. The understanding between decedent and her daughter at the time of the gift constituted the retention of beneficial possession or enjoyment under the transfer, within the meaning of section 2036.

It is undisputed that the house in question was decedent's actual residence up to the time of her death. This case therefore fits within the literal wording of the statute, requiring only that possession or enjoyment be retained by the decedent "for any period which does1976 U.S. Tax Ct. LEXIS 45">*52 not in fact end before [her] death." The result appears harsh -- had decedent lived a few months longer and had events transpired as planned, there would probably be no argument that the house was includable in her estate ³1976 U.S. Tax Ct. LEXIS 45">*55 -- but, if dictated by the statute, it must be imposed. This Court has on several occasions noted, but not adopted, a possible interpretation of section 2036 which would permit us to hold for petitioner. Estate of Francis M. Hendry, 62 T.C. 861">62 T.C. 875-876; Estate of Ethel R. Kerdolff, 57 T.C. 643">57 T.C. 643, 57 T.C. 643">649 (1972); Estate of Marie J. Nicol, 56 T.C. 179">56 T.C. 179, 56 T.C. 179">183 (1971). In National Bank of Commerce in Memphis v. Henslee, 179 F. Supp. 346 (M.D. Tenn. 1959), the court determined that the corresponding provision (section 811(c)(1)(B) of the 1939 Code) required gifts to be included in a transferor's estate only when the facts showed that his possession, enjoyment, or right to income -- which in fact was retained until his death -- was intended at the time of the gift to endure for his lifetime. ⁴The District Court relied both on the legislative1976 U.S. Tax Ct. LEXIS 45">*53 history of the Revenue Act of 1932 (S. Rept. No. 665, 72d Cong., 1st Sess., 1939-1 C.B. (Part 2) 496, 532) and on Treasury regulations interpreting the 1939 Code (sec. 81.18, Regs. 105, as amended by T.D. 5834, 1951-1 C.B. 72, 81, par. 8(A)). We find the cited legislative history to be inconclusive and subsequent reenactments have not been accompanied by clarification of congressional intent on this issue. Significantly, respondent's regulations (sec. 20.2036-1(a), Estate Tax Regs.), 66 T.C. 1080">*1084 which, insofar as this case is concerned, have been in effect since June 23, 1958 (see T.D. 6296, 1958-2 C.B. 432, 499), no longer make intention a test of includability under section 2036. See also 62 T.C. 861">Estate of Francis M. Hendry, supra;57 T.C. 643">Estate of Ethel R. Kerdolff, supra;56 T.C. 179">Estate of Marie J. Nicol, supra.We note, however, that this Court's decisions under the 1939 Code held that the phrase "for any period which does not in fact end before his death" should be interpreted literally and rejected any1976 U.S. Tax Ct. LEXIS 45">*54 limitation on its application where the decedent's retained possession, enjoyment, or right to income might have ended before his death if it did not in fact do so. Estate of Robert Manning McKeon, 25 T.C. 697">25 T.C. 697, 25 T.C. 697">704 (1956); Estate of Ambrose Fry, 9 T.C. 503">9 T.C. 503 (1947). See 56 T.C. 179">Estate of Marie J. Nicol, supra.Although there is some indication in the legislative history that Congress was thinking of situations where the period of retention was such as to evidence an intention that decedent's possession or enjoyment should continue for his life (see S. Rept. No. 665, supra), the wording of section 2036 itself is clear and unambiguous and reflects no such qualification. Such being the case, we find ourselves unable to adopt a loose construction in order to aid this petitioner (see Lowndes, Kramer & McCord, Federal Estate and Gift Taxes 201-202 (1974)) -- a course which could open up a Pandora's box of litigation. ⁵ Accordingly, respondent must prevail.

Decision will be entered for the respondent.