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B. The Assignment Agreement
By way of the assignment agreement, petitioners transferred
to CFT the right to a portion of the gifted interest. That
portion was not expressed as a specific fraction of the gifted
interest (e.g., one-twentieth), nor did petitioners transfer to
CFT a specific assignee interest in MIL (e.g., a 3-percent
assignee interest). Rather, CFT was to receive a fraction of
the gifted interest to be determined pursuant to the formula
clause contained in the assignment agreement. The formula
clause provides that CFT is to receive that portion of the
gifted interest having a fair market value equal to the excess
of (1) the total fair market value of the gifted interest, over
(2) $7,044,933. The formula clause is not self-effectuating, and
the assignment agreement leaves to the assignees the task of (1)
determining the fair market value of the gifted interest and (2)
plugging that value into the formula clause to determine the
fraction of the gifted interest passing to CFT.
Petitioners argue that, because the assignment agreement
defines fair market value in a manner that closely tracks the
definition of fair market value for Federal gift tax purposes,
see sec. 25.2512-1, Gift Tax Regs., the assignment agreement
effects a transfer to CFT of a portion of the gifted interest
determinable only by reference to the fair market value of that
interest as finally determined for Federal gift tax purposes. We
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