- 61 -
asserted value where the Commissioner introduced no evidence to rebut
taxpayer's expert testimony, citing Baldwin v. Commissioner, 10 B.T.A.
1198 (1928)); cf. Anselmo v. Commissioner, 80 T.C. 872, 886 (1983),
affd. 757 F.2d 1208 (11th Cir. 1985); Estate of Trompeter v.
Commissioner, T.C. Memo. 1998-35. Taking into account Mr. Bergwerk’s
valuation conclusion, we find that the fair market value of Arnold’s
51-percent interest in petitioner, which petitioner redeemed for all
of SIC’s stock, was $141,000.32
32 Respondent argues that petitioner, under the rule of
Commissioner v. Danielson, 378 F.2d 771 (3d Cir. 1967), vacating
and remanding 44 T.C. 549 (1965), cannot unilaterally vary the
terms of a contract for tax purposes and must therefore abide by
the terms of the sale to H�agen-Dazs in determining the value of
assets distributed to SIC and, in turn, the value of SIC stock
distributed to Arnold.
As we stated in Hospital Corp. of Am. v. Commissioner, T.C.
Memo. 1996-559:
As we understand the Danielson rule, it is not
applicable where the parties have not established the
fair market value of the property at the time agreement
is adopted because, under those circumstances, there is
no agreement to which a party may be held. See
Campbell v. United States, 228 Ct. Cl. [661,] 675-677
(1981); * * * see also Commissioner v. Danielson, 378
F.2d 771, 778 [(3d Cir. 1967)] ("it would be unfair to
assess taxes on the basis of an agreement the taxpayer
did not make”). Furthermore, the Danielson rule is not
applicable if the contract is ambiguous. See North
American Rayon Corp. v. Commissioner, 12 F.3d [583,]
589 [(6th Cir. 1993), affg. T.C. Memo. 1992-610] ("the
Danielson rule does not apply if there is no contract
between the parties or if the contract is ambiguous").
* * *
The allocation by the sale agreement of the $1,430,340 sales
price paid by H�agen-Dazs to SIC and Arnold between “Sellers’
Rights”, $1,144,272, and the records, $286,068, is not an
agreement made by petitioner as to the value of SIC stock. At
(continued...)
Page: Previous 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 NextLast modified: May 25, 2011