Charles T. McCord, Jr. and Mary S. McCord, Donors - Page 1

                                   120 T.C. No. 13                                    

                               UNITED STATES TAX COURT                                

           CHARLES T. MCCORD, JR., AND MARY S. MCCORD, DONORS, Petitioners            
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 7048-00.               Filed May 14, 2003.                  

                    Ps, their children, and their children’s                          
               partnership formed a family limited partnership (PT).                  
               In 1996, Ps assigned interests in PT to several                        
               assignees pursuant to an agreement that contains a                     
               formula clause.  The formula clause provides that (1)                  
               Ps’ children, trusts for their benefit, and S, a                       
               charitable organization, are to receive interests                      
               having an aggregate fair market value of a set dollar                  
               amount, and (2) C, another charitable organization, is                 
               to receive any remaining portion of the assigned                       
               interests.  Ps’ children agreed to pay all transfer                    
               taxes resulting from the transaction, including the                    
               estate tax liability under then sec. 2035(c), I.R.C.                   
               1986, that would arise if one or both Ps were to die                   
               within 3 years of the date of the assignments.                         
                    Pursuant to a second agreement, the assignees                     
               allocated the assigned interests among themselves in                   

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