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the buy-sell agreement’s price, when originally fixed,
represented full and adequate consideration and was not a
testamentary substitute, see id.; Bensel v. Commissioner, 36
B.T.A. at 254; Baltimore Natl. Bank v. United States, 136 F.
Supp. 642, 654 n.7 (D. Md. 1955).
The Court of Appeals for the Tenth Circuit indicated, in
Brodrick v. Gore, supra, that if a partnership buy-sell agreement
were entered into in bad faith, that could jeopardize the ability
of the agreement to control value for estate tax purposes. In
Brodrick v. Gore, 224 F.2d at 894, a father and his two sons
agreed to sell their interests in an oil and gas partnership,
during life or at death, only to each other at book value. After
the father’s death, the sons petitioned the probate court to be
compelled, as executors, to sell the father’s interest to
themselves at book value. See id. After a hearing, the probate
court found that the partnership agreement was valid, the estate
was obligated to sell at book value, the sons were obligated to
purchase, and book value27 was correctly calculated. See id. at
895.
The Commissioner determined a deficiency in estate tax on
the ground that the fair market value of the father’s interest
27Neither the published report of Brodrick v. Gore, 224 F.2d
892, 896 (10th Cir. 1955), nor the briefs, which we have
reviewed, specify the basis on which book value was to be
computed (e.g., financial statement, tax, or cash basis) under
the partnership buy-sell agreement.
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