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investment manager, rather than agree to an escrow arrangement
that was not required under the buy-sell agreements.
In other cases involving related party buy-sell agreements,
we focused on the existence and extent of meaningful negotiations
between the parties to determine whether the agreements were
designed to serve testamentary purposes. See Bensel v.
Commissioner, 36 B.T.A. at 253 (finding no testamentary purpose
due to evidence of extensive and hostile negotiations); Bommer
Revocable Trust v. Commissioner, T.C. Memo. 1997-380 (finding no
bona fide negotiations among related parties because family’s
attorney represented all parties to the buy-sell); Lauder II
(finding that no negotiations and unilateral determination of
formula price by decedent’s son evidenced testamentary
purpose).44 Petitioners argue that proving family members sought
44In Lauder II, supra, 64 T.C.M. (CCH) 1643, 1658-1659 n.20,
1992 T.C.M. (RIA) par. 92,736, at 92-3732 n.20, and accompanying
text, we observed:
the record is devoid of any persuasive evidence that
the Lauders negotiated with respect to the formula
price. To the contrary, the record indicates that
Leonard [decedent’s son] unilaterally decided upon the
formula price. Ronald [decedent’s son] could not
remember who decided upon the formula and only recalled
that Leonard had explained the formula to him. Estee
[decedent’s wife] had no specific recollection of
either of the agreements. Given these circumstances,
it appears that the parties never intended to negotiate
the matter, fully recognizing that an artificially low
price would provide estate tax benefits for all.* * *
20Presumably, if decedent and Estee were pursuing an
(continued...)
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