- 45 -
WHALEN, J., concurring: I agree with both the reasoning and
result of the majority opinion, but I write separately to make
the point that this case does not present the same issues
concerning the valuation of the indirect gifts as were presented
in Estate of Bosca v. Commissioner, T.C. Memo. 1998-251, and to
comment on the position of Judges Beghe and Ruwe, who make
interesting and worthwhile points, especially in light of the
increasing use of family partnerships.
In this case, the majority opinion decides two principal
issues. First, it rejects petitioner’s contention that the
transfers of leased land and bank stock made by petitioner should
be characterized as gifts to petitioner’s two sons of minority
interests in a family partnership, or as enhancements of his
sons’ existing partnership interests. Petitioner sought
that characterization of the transfers to justify the application
of substantial discounts in valuing the property. Contrary to
petitioner’s position, the majority characterizes the transfers
as indirect gifts to the sons of the leased land and bank stock.
The majority relies on section 25.2511-1(h)(1), Gift Tax Regs.,
which provides:
A transfer of property by B to a corporation generally
represents gifts by B to the other individual
shareholders of the corporation to the extent of their
proportionate interests in the corporation.
Based thereon, the majority holds that the transfers represent an
indirect gift to each of petitioner’s two sons of an undivided
25-percent interest in the leased land and bank stock. To my
Page: Previous 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 NextLast modified: May 25, 2011