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the distribution and their subsequent gift of their AT&T
preferred stock were parts of a single plan to completely
terminate their actual and constructive ownership of AT&T before
the end of 1966.
In Niedermeyer, this Court acknowledged that, where there is
a plan consisting of a redemption and one or more other steps
that results in a complete termination of the taxpayer’s interest
in a corporation, section 302(b)(3) may apply. Niedermeyer v.
Commissioner, supra at 291 (citing in support Leleux v.
Commissioner, 54 T.C. 408 (1970); Estate of Mathis v.
Commissioner, 47 T.C. 248 (1966)). The Court emphasized,
however, that the redemption “must occur as part of a plan which
is firm and fixed and in which the steps are clearly integrated.”
Id.
After searching the record for evidence in support of the
taxpayers’ alleged plan, the Court concluded that the evidence
presented was “too insubstantial to prove the existence of such a
plan.” Id. Among the facts on which the Court relied were the
following:
(1) The alleged plan was not in writing, and there was no
indication that the taxpayers communicated their donative
intention to the charity or to anyone.
(2) The taxpayers’ son who testified at trial about the
Lents stock acquisition did not mention any desire on the
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