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for several years. Rather, the assignment agreement contemplates
the allocation of the gifted interest based on the assignees’
best estimation of that value. Moreover, each of the assignees’
percentage interests was determined exactly as contemplated in
the assignment agreement (without recourse to arbitration), and
none can complain that they got any less or more than petitioners
intended them to get.45 Had petitioners provided that each donee
had an enforceable right to a fraction of the gifted interest
determined with reference to the fair market value of the gifted
interest as finally determined for Federal gift tax purposes,46
we might have reached a different result. However, that is not
what the assignment agreement provides.
45 We suppose that, at least in theory, there might be a
difference between (1) petitioners’ and the assignees’
expectation on Jan. 12, 1996 (the valuation date), regarding the
value of the portion of the gifted interest passing to CFT and
(2) the value of that portion as subsequently determined by the
assignees. However, no one has suggested how to value the first
quantity or that, on the facts before us, the difference would be
significant.
46 See, e.g., sec. 1.664-2(a)(1)(iii), Income Tax Regs.
(providing that a sum certain may be expressed as a fraction or
percentage of the value of property “as finally determined for
Federal tax purposes”, but requiring that actual adjusting
payments be made if such finally determined fair market value
differs from the initially determined value); sec. 20.2055-
2(e)(2)(vi)(a), Estate Tax Regs. (similar); sec. 25.2702-
3(b)(1)(ii)(B), Gift Tax Regs. (similar); Rev. Proc. 64-19, 1964-
1 C.B. 682 (discussing conditions under which the Federal estate
tax marital deduction may be allowed where, under the terms of a
will or trust, an executor or trustee is empowered to satisfy a
pecuniary bequest or transfer in trust to a decedent's surviving
spouse with assets at their value as finally determined for
Federal estate tax purposes).
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