- 103 -
blank endorsements of the stock, which the issuing bank
subsequently reissued to the intended beneficiaries. The court
stated:
The [intermediate] recipients either did not know they
were receiving a gift of stock and believed they were
merely participating in stock transfers or had agreed
before receiving the stock that they would endorse the
stock certificates in order that the stock could be
reissued to decedent’s family. [Id. at 361.]
The court further stated:
The evidence at trial indicated decedent intended to
transfer the stock to her family rather than to the
intermediate recipients. The intermediary recipients
only received the stock certificates and signed them in
blank so that the stock could be reissued to a member
of decedent’s family. Decedent merely used those
recipients to create gift tax exclusions to avoid
paying gift tax on indirect gifts to the actual family
member beneficiaries. [Id. at 363.]
In order for us to ignore petitioners’ allocation in the
assignment agreement, respondent must establish that petitioners
coordinated, and the charities colluded in or acquiesced to, a
plan to avoid petitioners’ gift taxes by undervaluing the
transferred interests and intended to divert CFT’s interest to
their sons and the trusts. See Heyen v. United States, supra;
Schultz v. United States, supra; Griffin v. United States, supra;
Estate of Murphy v. Commissioner, supra. Respondent did not
present the requisite evidence for us to invoke the substance
over form doctrine.
Respondent stated on brief that, after execution of the
assignment agreement, petitioners “washed their hands” of the
Page: Previous 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 NextLast modified: May 25, 2011