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rather than a gift. We believe, however, that a transfer of
property to an employee who is a member of the employer’s family
is more properly considered a gift when the transfer is not made
in recognition of the employee’s work but is made in connection
with the family relationship.
The transfer of most of the assets involved in this case is
clearly attributable to the familial relationship between the
Caracci parents and their children. It contrasts strongly to
situations cited by respondent involving compensation, such as
Strandquist v. Commissioner, T.C. Memo. 1970-84 (president of car
sales company taxable on value of new cars he received in excess
of value of used cars he turned in). Nor is this a situation
involving disguised rentals paid to a lessor-shareholder, as in
Haag v. Commissioner, 334 F. 2d 351, 355 (8th Cir. 1964), affg.
40 T.C. 488 (1963). Nor is it, in substance, a distribution with
respect to the stock of a controlling shareholder for his
personal benefit, as in Kenner v. Commissioner, T.C. Memo. 1974-
273 (doctor who owned tax-exempt hospital corporation taxed on
relatively small amounts it transferred to corporation that
operated his ranch in Arizona). Here, during the year in issue,
none of the home health care assets was distributed to any of the
children, and none of the children sold the stock or otherwise
benefited personally from the transfer of the home health care
assets to the for-profit entities.
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