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30, 1994, 3 months after the notice dates. We hereinafter refer
to the deferred payment of the sales price for Jean True’s
interests, pursuant to the provisions of the buy-sell agreements
giving the parties up to 6 months to “consummate” the sales, as
the deferred payment arrangement.
The amount Jean True received on the payment date,
$13,298,978, was equal to the sum of the formula prices for the
interests she sold, calculated as provided in the buy-sell
agreements. This sum did not include any stated interest or any
other adjustments to take account of the 3-month period between
the notice dates and the payment date.
Respondent asserts that the sales of Jean True’s interests
were completed for tax purposes on June 30, 1994, because the
benefits and burdens of ownership were transferred on that date.
Respondent further asserts that because the deferred payment
arrangement allowed 3 months to pass between the sale completion
date and the payment date, Jean True effectively lent her sons
(during that 3-month period) an amount equal to the $13,298,978
sales proceeds she was entitled to receive. Finally, respondent
asserts that this loan was in the nature of a gift, and that Jean
True therefore made a taxable gift to her sons of the value of
the use of the sale proceeds from June 30, 1994, to September 30,
1994.
Respondent has continued to assert, as determined by the
statutory notice, that the value of Jean True’s gift is $192,307.
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