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enforcement when son died),31 (4) failure to obtain comparables or
appraisals to determine the buy-sell agreement’s formula price,
see Bommer Revocable Trust v. Commissioner, supra; Lauder II, (5)
failure to seek professional advice in selecting the formula
price, see Bommer Revocable Trust v. Commissioner, supra; Lauder
II, (6) lack of provision in buy-sell requiring periodic review
of a stated fixed price, see Bommer Revocable Trust v.
Commissioner, supra, (7) exclusion of significant assets from the
formula price, see Lauder II (finding that omission of all
intangible assets from book value formula suggested testamentary
purpose), and (8) acceptance of below market payment terms for
purchase of decedent’s interest, see Bommer Revocable Trust v.
Commissioner, supra.
2. Adequacy of Consideration Test
Before determining whether the formula price in a buy-sell
agreement represented full and adequate consideration in money or
money’s worth, courts were required to decide, as a preliminary
matter, when and how the adequacy of consideration test would be
applied. For example, would the adequacy of consideration be
tested when the buy-sell agreement was adopted or when the buy-
sell restrictions were invoked at the decedent-stockholder’s
death? In addition, the term “adequate and full consideration”,
31But see Bommer Revocable Trust v. Commissioner, T.C. Memo.
1997-380 (disagreeing with the taxpayer’s contention that record
of prior enforcement requires that buy-sell agreement be
respected for estate tax purposes).
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