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arrangements and (2) book values equaled their fair market values
on the agreement dates.
We preface the inquiry by noting that petitioners properly
raised the collateral estoppel issue in their petition. See Rule
39. The jurisdictional competency of the District Court in the
1971 and 1973 gift tax cases has not been questioned. Judgments
were entered, and the Government did not appeal. The parties to
the cases at hand were also parties to the 1971 and 1973 gift tax
cases (i.e., both petitioners and respondent were parties or
privies in the earlier gift tax cases and were bound by those
decisions).40 In sum, conditions (2) and (3) of the Peck
requirements are satisfied.
1. Bona Fide Business Arrangement Issue
Petitioners argue that we are precluded from deciding
whether the True Oil and Belle Fourche buy-sell agreements
represented bona fide business arrangements under section
20.2031-2(h), Estate Tax Regs., because the District Court
implicitly made this determination in the 1971 and 1973 gift tax
cases. We disagree with petitioners, because the issue was not
40Specifically, the taxpayers in the 1971 and 1973 gift tax
cases were: Dave True, Jean True, Tamma Hatten, Hank True,
Diemer True, and David L. True. Petitioners in the cases at hand
are: Dave True’s estate (considered his privy) and Jean True.
The fact that the True children are not parties, in their own
right, to the cases at hand does not cause the remaining parties
to fail Peck requirement 3. See Peck v. Commissioner, 90 T.C.
162, 166-167 (1988), affd. 904 F.2d 525 (9th Cir. 1990).
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