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agreement, decedent reserved the right to revoke, modify, or
otherwise alter the terms of the trust, in whole or in part. On
December 17, 1980, and again on December 28, 1981, 3 shares of
stock in SOAI were transferred from the revocable trust to each
of four members of decedent's family: His son John Cidulka, his
daughter-in-law Charlesa Cidulka, his grandson John Joseph, and
his granddaughter Lauren. Lauren and John Joseph signed the
stock transfer records with respect to the shares transferred to
them in each of the years 1980 and 1981. Despite these purported
transfers, SOAI's 1980 and 1981 U.S. Corporation Income Tax
Returns, Forms 1120, listed only two stockholders, decedent with
a 51-percent interest, and John Cidulka with a 49-percent
interest in the outstanding corporate stock.
On the morning of January 25, 1982, decedent owned, in
trust, 424 shares, representing 52 percent of the outstanding 814
shares of SOAI. On that day, decedent resigned as chairman of
the board and retired from SOAI. Also on that day, decedent and
SOAI rescinded a stock redemption agreement applicable to the
stock of SOAI. Also on that day, decedent transferred by gift 40
shares of SOAI to family members and sold his remaining shares of
stock to SOAI in exchange for a promissory note in the face
amount of $370,000 (the promissory note). Decedent's attorneys,
Mr. Clyde Compton and Mr. Ed Hussey, planned the stock transfers.
Decedent did not obtain an appraisal of SOAI to determine the
fair market value of the stock as of the date of the sale of his
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Last modified: May 25, 2011