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alone acquired all the ranch property (real property and
operating assets). The District Court granted the Government’s
motion for summary judgment, designated as True v. United States,
No. 96-CV-1050-J, (Nov. 12, 1997), and held that the step
transaction doctrine required the recharacterization of the
ranchland exchange transactions as the IRS had determined. On
appeal, the Court of Appeals for the Tenth Circuit affirmed the
District Court’s decision regarding the ranchland exchange
transactions. See True v. United States, 190 F.3d 1165, 1177-
1180 (10th Cir. 1999). On November 15, 1999, the Court of
Appeals for the Tenth Circuit denied petitioners’ petition for
rehearing and rehearing en banc.
OPINION
I. Do Family Buy-Sell Agreements Control Estate Tax Value?
Case law and regulatory authority have interpreted the
general estate tax valuation provisions of section 2031 to
include special rules that allow qualifying buy-sell agreements
to control estate tax fair market value.
A. Framework for Analyzing Estate Tax Valuation Issues
Federal estate tax is imposed on the transfer of the taxable
estate of every United States citizen or resident. See sec.
2001(a); U.S. Trust Co. v. Helvering, 307 U.S. 57, 60 (1939).
The taxable estate is defined as the gross estate less prescribed
deductions. See sec. 2051. All property interests owned by the
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