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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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