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revoke a gift of stock if it was determined that, for gift tax
purposes, the fair market value of such stock exceeded $2,000 per
share. The Court similarly concluded that such a clause was a
condition subsequent and void because it was against public
policy.
Contrary to the valuation clauses in Commissioner v.
Procter, supra, and Ward v. Commissioner, supra, which adjusted
the amount transferred based upon a condition subsequent,
petitioners’ valuation clause defined the amount of property
transferred. Simply put, petitioners’ gift does not fail upon a
judicial redetermination of the transferred property’s value.
Petitioners made a legally enforceable transfer of assignee
interests to CFT, with no provision for the gift to revert to
petitioners or pass to any other party on the occurrence of
adverse tax consequences. CFT merely failed to protect its
interest adequately. Procter and Ward are distinguishable.
Petitioners’ formula clause was not against public policy.
IV. Conclusion
The majority seek to restrict petitioners’ charitable
deduction to that which CFT accepted in the confirmation
agreement. The parties agree that the gift closed upon the
execution of the assignment agreement. At that moment,
petitioners transferred and CFT had a $2,838,899 MIL interest.
CFT waived its arbitration rights, and petitioners did not
participate in the subsequent allocation. Whether CFT failed to
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