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Decedent’s Divestiture of National Fruit Stock
In 1991, at the age of 91, decedent began a program to
divest himself of his National Fruit stock. Decedent made gifts
of some of his stock; National Fruit redeemed the remainder.
Decedent’s Gifts of National Fruit Stock
On December 26, 1991, decedent gave 5,725 shares of National
Fruit common stock to each of four children–-Frank Armstrong III,
William T. Armstrong, JoAnne A. Strader, and Gretchen A. Redmond
(the donee children). At the same time, decedent gave 100 shares
to each of 11 grandchildren.
On January 3, 1992, decedent made additional gifts of
National Fruit common stock: Over 12,000 shares to each of the
donee children (12,732 each to two children, 12,532 shares to
another child, and 12,332 shares to the fourth child); another
100 shares to each of the 11 grandchildren; and 4,878 total
shares to two trusts that he established that same day.
The Transferee Liability Agreement
Also on January 3, 1992, decedent and the donee children
executed a transferee liability agreement (the transferee
agreement). The transferee agreement stated that for gift tax
purposes decedent would report the value of his 1991 and 1992
gifts of National Fruit stock as $100 per share. The transferee
agreement stated that decedent was making the January 3, 1992,
gifts to the donee children on the condition that they pay the
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Last modified: May 25, 2011