- 155 -
not limited to the formula price) are to be disregarded in
determining fair market value for estate tax purposes.
Rev. Rul. 59-60, 1959-1 C.B. 237, which provides valuation
guidance for both estate and gift tax purposes, states that a
buy-sell agreement is a factor to consider with other relevant
factors in determining fair market value. It further provides
that it is always necessary to determine whether the agreement
represents a bona fide business arrangement or is a testamentary
device. See id. We take these statements, together with Lauder
III and its interpretation of section 20.2031-2(h), Estate Tax
Regs., to mean that the same rule should apply to disregard
noncontrolling buy-sell agreements for gift tax and estate tax
valuation purposes. Cf. Estate of Reynolds v. Commissioner, 55
T.C. at 194 (holding that voting trust agreement preemption
provisions should not be disregarded in consolidated gift and
estate tax cases because the agreement was not a testamentary
device).
Issue 2. If True Family Buy-Sell Agreements Do Not Control
Values, What Are Estate and Gift Tax Values of Subject Interests?
FINDINGS OF FACT
After respondent’s concessions, the transferred interests
whose values remain in dispute are: True Oil, Eighty-Eight Oil,
and True Ranches, to be valued as of January 1, 1993, June 4,
1994, and June 30, 1994; Belle Fourche and Black Hills Trucking,
to be valued as of June 4, 1994, and June 30, 1994; and White
Page: Previous 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 NextLast modified: May 25, 2011