- 38 -
business and in his personal life." We hold that decedent had a
testamentary purpose in entering into both the 1975 and 1981
agreements.
Petitioners argue that the existence of a testamentary intent
should not be determinative if the price in the Buy-Sell Agreement
represented the fair market value on the date the agreement was
executed, citing Estate of Lauder v. Commissioner, T.C. Memo. 1992-
736, and Estate of Bischoff v. Commissioner, 69 T.C. 32 (1977).
Respondent argues that cases such as Estate of Lauder and Estate of
Bischoff involved formula prices that accounted for variations in
future value and are distinguishable from fixed price agreements.
We need not decide this point, because we find that petitioners have
not proven that $11,333.30 was the fair market value for a share of
CamVic in either 1975 or 1981.
Where shareholders are members of the same family and the
circumstances indicate that testamentary considerations influenced
the decision to enter into a restrictive stock agreement, an
assumption that the price stated in the agreement is a fair one is
unwarranted. It is then incumbent upon the estate to demonstrate
that the agreement establishes a fair price for the subject stock.
Estate of Gloeckner v. Commissioner, T.C. Memo. 1996-148; Estate of
Lauder v. Commissioner, supra. Such is petitioners' burden in the
instant case.
Both parties presented expert evidence regarding the value of
CamVic on the respective 1975 and 1981 dates of the two agreements.
Page: Previous 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 NextLast modified: May 25, 2011