- 37 - However, the facts in Rudolph are distinguishable. First, the agreement at issue in Rudolph provided for review of the stock purchase price at the annual stockholders meeting. In addition, the District Court found that there was no intent to escape the payment of estate taxes; there was no evidence in the record with respect to any discussion of the tax consequences that would result from the buy-sell agreement. Id. at 93-2179, 93-1 USTC at 88,452.27 Finally, petitioners argue on brief that if decedent's purpose in entering into the Buy-Sell Agreement was testamentary, he would not have agreed to restrict his right to make gifts of his shares to family members. Petitioners contend that decedent could have achieved significant estate tax savings by making annual gifts during the 15 years after the Buy-Sell Agreement was executed until his death in 1990. Petitioners' argument misses the mark, as they fail to recognize that continuous gifts over such a sustained period would have ultimately deprived decedent of his controlling interest in CamVic. This would have been unacceptable to decedent, whom petitioners describe on brief as "a controlling person in his 27Petitioners' reliance on several other cases is similarly misplaced. In Wilson v. Bowers, 57 F.2d 682 (2d Cir. 1932), the Court of Appeals for the Second Circuit did not even address the issue of testamentary device. In May v. McGowan, 194 F.2d 396, 397 (2d Cir. 1952), the Court of Appeals for the Second Circuit stated that "here the district court found that there was no purpose to evade taxes." In Bensel v. Commissioner, 36 B.T.A. 246 (1937), affd. 100 F.2d 639 (3d Cir. 1938), the Board of Tax Appeals found that the option was not a substitute for testamentary disposition or a device for avoiding tax. The Board also found that the final price per share had resulted from genuine arm's-length negotiations.Page: Previous 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 Next
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