- 21 -
consideration constituted gift by father of one-quarter interest
to each of three shareholder-sons); Estate of Bosca v.
Commissioner, T.C. Memo. 1998-251 (father’s transfer to a family
corporation of voting common stock in exchange for nonvoting
common stock represented gifts to each of his two shareholder-
sons of 50 percent of the difference in the values of the stock
the father transferred and of the stock he received); cf. Chanin
v. United States, 183 Ct. Cl. 745, 393 F.2d 972 (1968) (two
brothers’ transfers of stock in their wholly owned corporation to
the subsidiary of another family corporation constituted gifts to
the other shareholders of the family corporation, reduced by the
portion attributable to the brothers’ own ownership interests in
the family corporation).
Likewise, a transfer to a partnership for less than full and
adequate consideration may represent an indirect gift to the
other partners. See Gross v. Commissioner, 7 T.C. 837 (1946)
(taxpayer’s and spouse’s transfer of business assets into a newly
formed partnership among themselves, their daughter, and son-in-
law resulted in taxable gifts to the daughter and son-in-law).
Obviously, not every capital contribution to a partnership
results in a gift to the other partners, particularly where the
contributing partner’s capital account is increased by the amount
of his contribution, thus entitling him to recoup the same amount
upon liquidation of the partnership. In the instant case,
however, petitioner’s contributions of the leased land and bank
Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NextLast modified: May 25, 2011