Larry L. Sather, Donor, et al. - Page 15




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          1415, 1429 (1987).  As we understand it, petitioners' argument is           
          that all transfers by Larry, Kathy, John, Sandra, Duane, Diane,             
          and Rodney, in each year, were really separate steps of a single            
          transaction.  Therefore, petitioners argue, the transaction must            
          be viewed and taxed as a “whole”, and Rodney's participation                
          destroys the reciprocal nature of the entire transaction because            
          he received nothing in return for his gifts.                                
               To the extent petitioners suggest that Rodney's unilateral             
          gift giving somehow validates the entire transaction and destroys           
          the reciprocal nature of the gifts, we disagree.  Rodney is a               
          separate taxpayer whose gifts have not been challenged.  That his           
          gifts may have passed scrutiny does not dictate the result as to            
          the other taxpayers.  Rodney's participation in the gift giving             
          in no way lends economic reality to the form in which the other             
          donors structured the transfers, and his participation does not             
          immunize the questioned transfers from application of the                   
          doctrine of economic substance or the reciprocal trust doctrine.            
               This leaves the issue of whether the Larry Trust, the John             
          Trust, and the Duane Trust are liable as transferees for the                
          unpaid gift tax and additions to tax of Kathy, Sandra, and Diane,           
          respectively.  The second sentence of section 6324(b)4 provides             

               4SEC. 6324. Special Liens for Estate and Gift Taxes.                   
                    (b) Lien for Gift Tax.-- * * * unless the gift tax                
               imposed by chapter 12 is sooner paid in full or becomes                
               unenforceable by reason of lapse of time, such tax                     
                                                             (continued...)           




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