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benefits associated with his or her investment. The estate
executor has no such discretion at the decedent-stockholder’s or
decedent-partner’s death.
In any event, the same buy-sell agreements are at issue for
both estate and gift tax purposes, and we have found them to be
substitutes for testamentary dispositions under Lauder II and
section 20.2031-2(h), Estate Tax Regs. Therefore the True family
buy-sell agreements at issue in the cases at hand do not control
values for gift tax purposes.
2. Lifetime Transfers by Dave and Jean True Were Not
in Ordinary Course of Business
As previously discussed, sales or exchanges for less than
adequate and full consideration constitute gifts. See sec.
2512(b); Commissioner v. Wemyss, 324 U.S. 303 (1945); sec.
25.2512-8, Gift Tax Regs. However, a sale made in the ordinary
course of business (bona fide, at arm’s length, and free from
donative intent) is considered to have been made for adequate and
full consideration. See Commissioner v. Wemyss, 324 U.S. at 306-
307; sec. 25.2512-8, Gift Tax Regs.
Dave and Jean True’s sales of interests in the True
companies were not made in the ordinary course of business. In
1993, Dave True sold partial interests in the various True
companies that were partnerships to ensure that, on his death,
his estate would secure the benefits of pre-Chapter 14 rules
regarding the determinative nature of buy-sell agreements for
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