contrary to the rights of forced heirs in Louisiana, for marital deduction purposes, was to be treated as void, regardless of its void or voidable nature under Louisiana law. Therefore, any such interest that the surviving spouse actually received was treated as passing not from the decedent to the surviving spouse, but from the decedent to the forced heirs and then to the surviving spouse. Accordingly, the District Court held that such an interest was not eligible for the marital deduction. The District Court's decision in Bel on the marital deduction issue was remanded by the Fifth Circuit for an analysis of that issue under the provisions of section 20.2056(e)-2(d)(2), Estate Tax Regs. Bel v. United States, 452 F.2d 683, 694 (5th Cir. 1971). Those provisions do not apply in this case. Respondent, however, cites the District Court opinion in Bel as controlling our resolution of this case. We find the District Court's opinion in Bel to be inapplicable. The charitable deduction provisions of section 2055 that apply in this case contain no provision comparable or even analogous to the anti-disclaimer provision of section 2056 that applied to the year at issue in Bel. That opinion is completely distinguishable from the facts and law of the instant case and provides no support for respondent's position herein. For the reasons stated, we conclude that the charitable deduction in question is allowable under section 2055. Petitioners' motion for summary judgment will be granted. An appropriate order will be entered. (2) BY ANY OTHER PERSON.-If under this section an interest would, in the absence of a disclaimer by any person other than the surviving spouse, be considered as passing from the decedent to such person, and if a disclaimer of such interest is made by such person and as a result of such disclaimer the surviving spouse is entitled to receive such interest, then such interest shall, for purposes of this section, be considered as passing, not to the surviving spouse, but to the person who made the disclaimer, in the same manner as if the disclaimer had not been made. DONALD A. PECK AND JUDITH W. PECK, PETITIONERS v. .COMMISSIONER OF INTERNAL REVENUE, RESPONDENT Docket No. 17904-81. Filed January 28, 1988. In 1974, Ps transferred land (but not the improvements thereon) to PL, their controlled corporation, and leased back the land from PL under lease agreements under which the rent was fixed for the first 5 years of the leases. In Peck v. Commissioner, T.C. Memo. 1982-17, affd. 752 F.2d 469 (9th Cir. 1985), it was held under sec. 482, I.R.C. 1954, that the rental payments for the first 3 years of the lease were excessive. Held, Ps are collaterally estopped from litigating the reasonableness of the rental payments for the remaining 2 years of the original 5-year term of the lease. Harry J. Kaplan, for the petitioners. OPINION NIMS, Judge: This matter is before the Court on respondent's motion for partial summary judgment under Rule 121.1 The parties submitted a stipulation of facts which consists of the stipulation of facts with exhibits from petitioners' prior Tax Court case, copies of petitioners' Federal income tax returns for the years in issue, and schedules of property taxes paid for the years at issue. By order of the Court, the deficiency notice was also made part of the record, not having been previously submitted. There being no genuine issue as to any material fact on the issue of whether collateral estoppel applies in this case, a partial summary adjudication is appropriate under Rule 121. Respondent determined deficiencies in petitioners' income tax in the respective amounts of $15,815 and $15,952 for 1977 and 1978, based primarily upon the disallowance of deductions for land rent in the amount of $24,870 for each of these 2 years.2 At a hearing on respondent's motion for leave to file amendment to answer (by which the issue of 1All Rule references are to the Tax Court Rules of Practice and Procedure. Except as otherwise noted, all section references are to the Internal Revenue Code in effect for the years in issue. "The 1977 and 1978 deficiencies were also based upon certain adjustments now agreed to by the parties and mathematical adjustments to medical expense deductions required by the disallowance of the rent deductions and the other unrelated adjustments. collateral estoppel was raised), respondent's counsel modified the deficiencies determined by the Commissioner as follows: MS. HILL: I would move for a motion for [partial] summary judgment which would be in a different amount from the amount set forth in the notice, because if, indeed, summary judgment does apply, then it's about two-thirds of the amount that was disallowed in the notice that the court had disallowed in the previous case. If collateral estoppel applies, it applies also against the government, and the government doesn't get the entire deficiency. So, I would file a motion for [partial] summary judgment and request a decision be entered in a lesser amount. The issue before the Court is whether Peck v. Commissioner, T.C. Memo. 1982-17, affd. 752 F.2d 469 (9th Cir. 1985) (Peck I), collaterally estops petitioners from relitigating for the years in question the issue of whether petitioners' rental payments to their controlled corporation exceeded what would have been fair rental in an arm's-length transaction. Background Petitioners were residents of Saratoga, California, at the time they filed their petition in this case. On September 11, 1974, petitioners created Peck Leasing, Ltd. (Peck Leasing), a California corporation. At that time, petitioners owned six parcels of residential rental real estate and two parcels of commercial rental real estate. Only the land was transferred to Peck Leasing. Petitioners retained the improvements. At the time of the transfer to Peck Leasing, the land and improvements of all eight parcels had a total value of at least $950,000, the value of the land alone being $283,000; all mortgage liability against the property was nonrecourse and totaled $506,585. At about the time the land was transferred to Peck Leasing, petitioners leased the land back to themselves. The annual rent paid was $24,870 for the first 5 years of the lease. The leases provided that after the first 5 years rent would increase in accordance with increases in the Consumer Price Index. The annual land rent provided for in the leases was approximately 9 percent of the total value of the land. Petitioners paid the interest and principal with respect to loans secured by both the land and building portions of the properties. Peck Leasing used the cash-flow from the land rents to embark on an automobile leasing business. At the time of the trial of Peck I, Peck Leasing operated a fleet of automobiles with value in excess of $600,000. This Court found in Peck I that the transfer of real estate to Peck Leasing and the subsequent leaseback were valid transactions and would be recognized for tax purposes. The Court also held, under section 482, that with respect to the years then before the Court, payment of 25 percent of the taxes on the eight parcels, 25 percent of the mortgage payments, and all of the gardening expense were, when added to the rental payments provided under the leases, payments in excess of what would have been negotiated by parties to an arm's-length transaction. In so concluding, we stated: "petitioners have failed to show respondent abused his discretion when he determined petitioners paid 'excessive' rent." The Ninth Circuit affirmed the Tax Court in a split decision, discussed infra. The following table reflects the amounts of mortgage payments, taxes, and gardening expenses related to the eight properties paid by petitioners for the years 1974 to 1978, inclusive: In determining the portion of the taxes and mortgage payments (principal and interest) attributable to the land in Peck I, we directed the parties to use the tax assessor's ratio of allocating 25 percent of the total property market value to the land. All gardening expenses were attributed to the land. T.C. Memo. 1982-17, n. 8. The deficiency notice herein is dated April 13, 1981, and the petition was filed on July 13, 1981, both predating our opinion in Peck I (published January 12, 1982). Thus, there is no problem of timing due to the pendency of a related case. See Union Carbide Corp. v. Commissioner, 75 T.C. 220, 252 (1980), affd. per curiam 671 F.2d 67 (2d Cir. 1982). Respondent made the following determination in the deficiency notice regarding the Peck Leasing transactions which are before the Court: Explanation of Adjustments (a) During 1977 and 1978 you engaged in transactions with Peck Leasing, Ltd., a corporation owned or controlled by you, from which you claimed a deduction for land rent in the amounts of $24,870.00 in each year. The deduction is being disallowed under Section 482 of the Internal Revenue Code of 1954 in order to prevent evasion of taxes or clearly to reflect your income and the income of Peck Leasing, Ltd. Accordingly, your gross income is increased $24,870.00 in each year. The petition alleges, among other things, that respondent erroneously increased the taxable income of petitioners "by disallowing their deduction for land rent paid in the tax years 1977 and 1978 in the amount of $24,870.00 in each year." Thus, the issue raised here is the same issue that was resolved by Peck I. Discussion This case presents an archetypical opportunity for the application of collateral estoppel. See Lark Sales Co. v. Commissioner, T.C. Memo. 1976-291. As required by Rule 39, respondent has affirmatively pleaded collateral estoppel by an amendment to answer filed with leave of Court on January 26, 1987. We of course recognize that as applied to tax litigation, each year creates a new cause of action even if the issue arises from a continuing transaction. Commissioner v. Sunnen, 333 U.S. 591, 597 (1948). As noted by the Supreme Court in Sunnen, res judicata precludes parties to a suit and their privies from contesting a cause of action on which a final judgment has been entered on the merits by a court of competent jurisdiction. Thus, under res judicata, the parties would be precluded from relitigating the tax years 1974 through 1976 but are not precluded from litigating 1977 and 1978. However, as we said in Lark Sales Co. v. Commissioner, supra, "A different situation arises where the subsequent |