- 25 -
the inference is that there was such an understanding.
Petitioner, of course, has offered no proof that there was not
such an understanding and, since respondent determined that the
shares were gifts to John Cidulka, the burden is on petitioner to
show to the contrary. We also conclude from the record that the
1982 transfers of 10 shares each to John Cidulka's teenage
children were not intended as gifts to them. They did not
acknowledge receipt of these shares on the records of SOAI and
were not listed as shareholders by SOAI, nor did they ever derive
any benefit from ownership of these shares. When the SOAI assets
were sold, they received none of the proceeds. John Cidulka's
children were adults at the time of this trial, but were not
called as witnesses. Based on the evidence in this case, we
conclude that on January 25, 1982, 424 shares of SOAI stock,
which constituted a majority interest, were effectively
transferred to John Cidulka and, therefore, we are valuing the
transfer of a controlling interest in SOAI to John Cidulka on
that date. Furthermore, this Court and the Court of Appeals for
the Seventh Circuit have held that a hypothetical bifurcation of
stock for the purpose of its valuation as a minority interest
will not be recognized since it would be an easy method of
implementing a tax-avoidance scheme. Northern Trust Co. v.
Commissioner, 87 T.C. 349, 386-388 (1986); see also Estate of
Curry v. United States, 706 F.2d 1424, 1426-1430 (7th Cir. 1983).
For this further reason we considered a majority interest in the
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