- 115 -
More importantly, we declined to give effect to the gift
adjustment agreement. We noted that honoring the adjustment
agreement would run counter to the policy concerns articulated in
Commissioner v. Procter, supra. Ward v. Commissioner, supra at
113. We also concluded that upholding the adjustment agreement
would result in unwarranted interference with the judicial
process, stating:
Furthermore, a condition that causes a part of a
gift to lapse if it is determined for Federal gift tax
purposes that the value of the gift exceeds a given
amount, so as to avoid a gift tax deficiency, involves
the same sort of “trifling with the judicial process”
condemned in Procter. If valid, such condition would
compel us to issue, in effect, a declaratory judgment
as to the stock’s value, while rendering the case moot
as a consequence. Yet, there is no assurance that the
petitioners will actually reclaim a portion of the
stock previously conveyed to their sons, and our
decision on the question of valuation in a gift tax
suit is not binding upon the sons, who are not parties
to this action. The sons may yet enforce the gifts.
[Id. at 114.]
Here, CFT receives no benefit from the Court-determined
increase in the value of the subject property, but petitioners
benefit in that they are entitled to an additional charitable
deduction. As was true in Commissioner v. Procter, supra, the
possibility of an increased charitable deduction serves to
discourage respondent from collecting tax on the transaction
because any attempt to enforce the tax due on the transaction is
of no advantage to the fisc.
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