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Petitioners argue that courts have upheld fixed price
agreements in similar circumstances and that case law supports their
position. We disagree. The facts in the present case are clearly
distinguishable from those in cases where fixed price agreements
were upheld. For instance, in Estate of Littick v. Commissioner, 31
T.C. at 185, a corporation purchased the decedent's shares at death
pursuant to a buy-sell agreement for a price that was less than the
stock's fair market value on the date of the decedent's death. In
holding the agreement controlling for estate tax valuation purposes,
we stated that "there is nothing in the record to indicate that the
$200,000 figure was not fairly arrived at by arm's-length
negotiation or that any tax avoidance scheme was involved." Id. at
186. In Estate of Littick, the corporation had three shareholders
who held almost equal shares, and this Court was convinced that the
agreement was the product of arm's-length bargaining. In the
instant case, in contrast, the Buy-Sell Agreement was executed
following a single meeting among decedent, who was an 86-percent
majority shareholder, Ronald, and Mr. Hughes, decedent's longtime
attorney who represented all parties to the agreement. In addition,
we have already noted the extensive evidence of testamentary device
present in this case.
In Rudolph v. United States, 71 AFTR 2d 93-2169, 93-1 USTC par.
60,130 (S.D. Ind. 1993), a buy-sell agreement which required a
corporation to purchase the decedent's shares at death for $1,000
per share was held to control the value for estate tax purposes.
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