- 29 -
that these concerns prompted him to approach Mr. Hughes, who, in
turn, suggested the efficacy of a restrictive stock agreement.
Following our review of the record, we find that Ronald's
retention played some part in the creation of the Buy-Sell
Agreement. At the time the agreement was created, Ronald was
relatively young and had already worked at CamVic for over 20 years.
During that time, he had gained solid experience through his work
with CamVic's properties. Ronald also had concerns with respect to
his security in the business. Under these circumstances, we
conclude that it was reasonable for Ronald to attempt to solidify
his future at CamVic through the creation of a restrictive stock
agreement.20 We find that there was some business purpose for
entering into the Buy-Sell Agreement and the Revised Agreement.
In order to meet the test set forth in section 20.2031-2(h),
Estate Tax Regs., and applied in Estate of Lauder v. Commissioner,
supra, petitioners must also demonstrate that the agreement was not
intended as a device to pass decedent's interest in CamVic to the
natural objects of his bounty for less than an adequate and full
consideration in money or money's worth. Petitioners have failed to
do this. For the reasons set forth below, we conclude that an
inference may fairly be drawn that the Buy-Sell Agreement and the
20Nevertheless, we note that nothing in the Buy-Sell
Agreement prevented Ronald from leaving CamVic or decedent from
continuing to make "impulsive" business decisions. Decedent had
the controlling interest in CamVic and could have caused CamVic
to buy or sell properties.
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