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relationship to the unrestricted fair market value of the
interest in question. See Lauder II. Again, these standards
must be applied with the heightened scrutiny imposed on
intrafamily agreements restricting transfers of closely held
businesses. See Hoffman v. Commissioner, 2 T.C. at 1178-1179.
Petitioners argue that the book value formula price used in
the True companies’ buy-sell agreements reflected adequate and
full consideration as required in section 20.2031-2(h), Estate
Tax Regs., and as interpreted by relevant case law. For the
reasons stated below, we disagree.
a. Petitioners’ Brodrick v. Gore/Golsen Argument
Petitioners argue that the proper standard for determining
whether consideration was adequate and full can be found in
Brodrick v. Gore, 224 F.2d 892 (10th Cir. 1955). They contend
that the Court of Appeals for the Tenth Circuit held in Brodrick
v. Gore that, as a matter of law, an agreement containing legally
binding and mutual obligations among family members to sell and
purchase partnership interests at book value constitutes adequate
and full consideration, absent a showing of bad faith. See supra
pp. 65-66. Petitioners further argue that, under Golsen v.
Commissioner, 54 T.C. 742, 756 (1970), affd. 445 F.2d 985 (10th
Cir. 1971), we must follow Brodrick v. Gore because the cases at
hand are appealable to the Court of Appeals for the Tenth
Circuit.
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