Estate of H.A. True, Jr. - Page 271




                                       - 34 -                                         
              The buy-sell agreements did not provide a mechanism for                 
          periodic review or adjustment to the book value purchase price              
          formula, other than what would occur as a result of changes in              
          book value.                                                                 
              Messrs. Harris and Tangney recommended that Dave True obtain            
          an appraisal of True Oil’s oil and gas reserves contemporaneously           
          with the gifts to the children because they expected the book               
          value gift valuation to be challenged by the Internal Revenue               
          Service (IRS).  Either the True Companies or Dave and Jean True,            
          personally, had been audited for income tax purposes regularly in           
          all tax years preceding the gifts.  The appraisal was prepared by           
          Bernie Allen14 (B. Allen report), an engineer from Casper,                  
          Wyoming, before Dave True made the gifts of True Oil interests to           
          his children.  No appraisal of Belle Fourche was prepared                   
          contemporaneously with the sale of 1-percent interests to the               
          True children.                                                              
              The B. Allen report indicated that as of August 1, 1973,                
          True Oil had reserves of 5,297,528 barrels of proved developed              
          oil and 8,551,994 thousand cubic feet (Mcf) of proved developed             
          gas, and that the fair market value of its oil and gas properties           



               14The B. Allen report was not admitted into evidence because           
          it could not be located at the time of trial.  However, the SRC             
          appraisal prepared for purposes of the subsequent True Oil gift             
          tax case cited valuation data derived from the B. Allen report.             
          We assume that the information contained in the SRC appraisal               
          accurately reflects the data set forth in the B. Allen report.              





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