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partnership's land in the event the partnership terminated.
During 1988, decedent advised Mr. Shadle that she wished to
proceed with the above plan. She further instructed him to tell
her grandchildren that her sale of the four parcels to them would
be conditioned upon their agreeing to contribute the land to the
family partnership Mr. Shadle would help them organize and
establish.
In connection with helping decedent to effectuate the
private annuity transaction, Mr. Shadle needed to obtain
valuations of (1) the four parcels decedent would sell to her
grandchildren and (2) the private annuity the grandchildren would
promise to pay her in exchange for the land. As an experienced
estate planner, Mr. Shadle believed that there should be no
potential Federal estate and gift tax liabilities on decedent's
part from the private annuity transaction if the value of the
private annuity decedent received equaled the value of the land
she transferred to her grandchildren. Before advising decedent
with respect to the private annuity transaction in issue, Mr.
Shadle had helped other clients to arrange between 5 and 10
private annuity transactions. These earlier private annuity
transactions mostly involved certain ranch properties. In these
earlier transactions, either a Big Six accounting firm or the
client's accountant had determined the annual payment to be made
under each of the private annuities.
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Last modified: May 25, 2011