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Courts have developed a set of requirements for determining
whether the price set forth in a restrictive agreement controls for
purposes of the Federal estate tax. In Estate of Lauder v.
Commissioner, supra, we summarized these requirements:
It is axiomatic that the offering price must be fixed and
determinable under the agreement. In addition, the
agreement must be binding on the parties both during life
and after death. Finally, the restrictive agreement must
have been entered into for a bona fide business reason and
must not be a substitute for a testamentary disposition.
[Citations omitted.]
See also St. Louis County Bank v. United States, supra at 1210;
Estate of Gloeckner v. Commissioner, supra.
We will first analyze the original Buy-Sell Agreement under the
standard set forth in Estate of Lauder v. Commissioner, supra.
Respondent concedes that the Buy-Sell Agreement established a fixed
and determinable price for the stock. Thus, we shall focus on the
remaining three requirements.
The first requirement is whether decedent was bound by the
terms of the original Buy-Sell Agreement executed in May 1975.
Petitioners maintain that it was not intended that decedent would
have the unilateral ability to amend the terms of the Buy-Sell
Agreement. Petitioners argue that the original agreement controls,
since, in their view, the purpose of the Revised Agreement was
simply to correct a "scrivener's error"; i.e., the percentage of
stock ownership necessary to alter the terms of the agreement. The
parties agree that the only significant change produced by the
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