Estate of Marvin M. Schwan - Page 19




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          of the Redemption Agreement took effect only upon and because of            
          the distribution to the Foundation.  On the facts before us, we             
          agree with respondent.                                                      
               Since the Redemption Agreement placed no restrictions on               
          decedent’s freedom to use or dispose of his interest in SSE, the            
          instrument clearly had no impact on the stock’s value prior to              
          his death.  More importantly and notwithstanding the existence of           
          the Redemption Agreement, neither did decedent’s death cause his            
          25,915,076 shares in SSE to represent anything less than two-               
          thirds of the equity and two-thirds of the vote in SSE.  If,                
          prior to the distribution to the Foundation, a hypothetical buyer           
          could have purchased all of the stock from the Estate, such buyer           
          would have succeeded to decedent’s full interest, unrestricted by           
          the terms of the Redemption Agreement.  This follows from the               
          fact that the Foundation is the only person or entity upon whom             
          the Redemption Agreement would operate to require the surrender             
          of shares.  Hence, any changes in value accruing as a result of             
          the Redemption Agreement would be a function of the stock’s                 
          coming to rest in the hands of a particular beneficiary.  Such              
          changes do not involve a predistribution transformation required            
          to be considered for purposes of the gross estate.  See Ahmanson            
          Found. v. United States, supra at 768.                                      
               Furthermore, if and when the Redemption Agreement became               
          operative upon distribution of the stock to the Foundation, the             






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