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petitioner's and decedent's business agreement obligated decedent
to transfer land to petitioner.
Petitioners cite Cobb v. Commissioner, supra, in which the
owner of land granted an option to an unrelated person to buy her
farm at less than market value in return for his agreement to
manage the farm for her for as long as she owned it. The owner
died within a year after the agreement was reached, resulting in
a windfall to the option holder. We found that the agreement was
made at arm's length for business purposes and without donative
intent.
Petitioners' reliance on Cobb is misplaced. In Cobb, the
owner gave an option to buy the land as part of a business
agreement. Here, decedent was not obligated to transfer any
interest in the land to petitioner as part of decedent's business
arrangement with petitioner. Also, in contrast to Cobb, decedent
and petitioner had a very close personal relationship (like
mother and son), and decedent left most of her estate to
petitioner.
Petitioners also cite Rev. Rul. 80-196, 1980-2 C.B. 32, and
Hull v. Commissioner, T.C. Memo. 1962-199. Petitioners' reliance
on Rev. Rul. 80-196, supra, and Hull v. Commissioner, supra, is
misplaced. In Rev. Rul. 80-196, the Commissioner ruled that
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