40
possess the shares on March 1, 1993; they had to exercise the
option and pay the option price.
Unlike Estate of Shafer, where the decedent paid for a
remainder interest that the seller conveyed to the decedent's
sons, Brown did not pay Sawyer for the 212 shares; instead, five
members of his family paid $1,556,000 for the shares when Brown's
sons exercised the option in 1993.7
Paul Brown did not make an inter vivos transfer of Sawyer's
212 shares of Bengals stock. Thus, one of the three requisites
for application of section 2036(a) is not met, and section
2036(a) does not apply to those shares.
E. Whether Paul Brown Retained an Interest in the 329 Shares
of Bengals Stock Which Were Subject to the 1983 Agreement
Petitioner contends that the 329 shares of Bengals stock
which were subject to the 1983 agreement are not included in Paul
Brown's estate under section 2036(a) because Brown did not retain
possession or enjoyment of those shares. We need not reach this
issue in light of our conclusions that Brown received full and
adequate consideration for his 117 shares of Bengals stock and
7 This case is also distinguishable on other grounds from
Estate of Shafer v. Commissioner, 749 F.2d 1216 (6th Cir. 1984),
affg. 80 T.C. 1145 (1983). Paul Brown did not acquire the right
to vote Sawyer's 212 shares in exchange for the right to receive
dividends from Brown's 117 shares of Bengals stock for 10 years;
he already had the right to vote Sawyer's 212 shares under the
pre-existing all shareholders, controlling shareholder, and
voting trust agreements. In contrast, the decedent in Estate of
Shafer had no interest of any kind in the property before he
bought it from the seller.
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