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time as their value can be realized, C will be under no
legally binding obligation to do so at the time the
farm items are transferred to the unitrust. Thus,
based upon the representations made and the principle
enunciated in the authorities cited above, A will not
recognize any income on a sale by the unitrust of farm
items that he has transferred to it.
Although we do not question the validity of the opinions of
this Court and the Courts of Appeals upon which respondent
relies,9 we are not prepared to allow respondent’s counsel to
9It appears that the result we reached in Ferguson v.
Commissioner, 108 T.C. 244 (1997), affd. 174 F.3d 997 (9th Cir.
1999), is consistent with the result that would have been
obtained under Rev. Rul. 78-197, 1978-1 C.B. 83, because in
Ferguson, we found that the donee could have been compelled to
surrender the stock at the time of the gift. In Ferguson v.
Commissioner, supra at 263, we stated:
We believe, instead, that when more than 50 percent of
the outstanding shares of AHC stock had been tendered
or guaranteed, which in effect was an approval of the
merger agreement, and the charities could not vitiate
the intention of the shareholders who had tendered or
guaranteed a majority of AHC stock, of petitioners, and
of DC Acquisition and CDI, the right to merger proceeds
matured. * * *
Likewise, in the other cases upon which respondent relies, the
donees were powerless, at the time of the gifts, to reverse the
courses of disposition set by the donors or third parties. See
Jones v. United States, 531 F.2d 1343 (6th Cir. 1976)
(contribution of 10-percent stock interest in corporation whose
shareholders had overwhelmingly approved a plan of complete
liquidation); Hudspeth v. United States, 471 F.2d at 279
(taxpayer’s retained control over corporation rendered donees
with minority interest powerless to vitiate the taxpayer’s
“manifest intent to liquidate”); Estate of Applestein v.
Commissioner, 80 T.C. 331 (1983) (bargain sale of 3-percent stock
interest in corporation following approval of merger plan by
shareholders); Kinsey v. Commissioner, 58 T.C. at 266 (charitable
donee with 56-percent majority interest did not have the legal
power to stop a complete liquidation). Unlike the donees in
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