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estate tax valuation purposes. Likewise, Jean True’s sales to
her sons in 1994, shortly after her husband’s death, fulfilled
the couple’s overall testamentary plan to pass the family
businesses to their sons. These motivations for the sales were
not devoid of testamentary (or donative) intent. In addition, we
have already discussed at length how the creation and continued
enforcement of the True companies’ book value buy-sell agreements
lacked indicia of arm’s-length dealing. See supra pp. 101-144;
Harwood v. Commissioner, 82 T.C. at 258 (“We do not believe that
a transfer by a mother to her sons of her interest in the family
partnership, structured totally by the family accountant, with no
arm’s-length bargaining, can be characterized as a transaction in
the ordinary course of business.”).
Petitioners erroneously argue that section 2512(b) does not
apply to the lifetime sales by Dave and Jean True; therefore,
they provide no evidence and only conclusory statements to
support their conclusion that the sales were made in the ordinary
course of business.
In conclusion, because the buy-sell agreements do not
establish gift tax fair market value, we must independently
determine value and compare that value to consideration paid in
the 1993 and 1994 lifetime transfers to decide whether interests
in the True companies were transferred for less than adequate and
full consideration. Any excess of the value of interests
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