- 98 -
Accordingly, pursuant to section 2501, the entire $9,883,832
transfer is subject to gift tax, and a charitable deduction is
allowed for the $2,972,899 (i.e., $9,883,832 - $6,910,933)
transferred to or for the use of the Symphony and CFT. Sec.
2522. CFT’s retention of a much smaller interest (i.e.,
3.62376573 percent) than what petitioners transferred to it has
no effect on the value of the transferred property on the date
the gift became complete.6
B. Determination by the Donees Does Not Bind This Court
The majority conclude that petitioners may deduct the
$2,838,899 (i.e., $9,883,832 - $7,044,933) transferred to CFT on
January 12, 1996, only if the agreement gave each donee “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”. Majority op.
p. 63 (emphasis added). Simply put, the majority are wrong.
First, a $2,838,899 MIL interest was transferred to or for
the use of CFT. In their fervor to reject this transaction, the
6 CFT’s subsequent transfer of MIL interests may have
conferred an impermissible private benefit on petitioners’ sons.
See Am. Campaign Acad. v. Commissioner, 92 T.C. 1053
(1989)(holding that conferral of a benefit on an unrelated person
may constitute an impermissible private benefit). The deduction
pursuant to sec. 2522 is not allowed for a transfer to an
organization unless such organization is operated exclusively for
one or more of its charitable purposes. Sec. 25.2522(a)-1(b),
Gift Tax Regs. Respondent, however, did not raise, or present
any evidence relating to, this issue.
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