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accordance with the formula clause, based on an agreed
aggregate value of $7,369,277.60 for the assigned
interests. Less than 6 months after the date of the
assignment, PT redeemed the interests of S and C
pursuant to a call option contained in PT’s partnership
agreement.
1. Held: Ps assigned only economic rights with
respect to PT; such assignments did not confer partner
status on the assignees.
2. Held, further, the aggregate fair market value
of the interests assigned by Ps on the date of the
gifts was $9,883,832.
3. Held, further, the amount of Ps’ aggregate
charitable contribution deduction under sec. 2522,
I.R.C. 1986, resulting from the transfer to C is
determined on the basis of the fair market value of the
interest actually allocated to C under the second
agreement, rather than the interest that would have
been allocated to C under the second agreement had the
donees determined a fair market value for the assigned
interests equal to the fair market value determined by
the Court.
4. Held, further, Ps’ respective taxable gifts
for 1996 are determined without reference to the
contingent estate tax liability that their children
assumed under the first agreement.
John W. Porter and Stephanie Loomis-Price, for petitioners.
Lillian D. Brigman and Wanda M. Cohen, for respondent.
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