- 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.
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