Estate of George C. Blount, Deceased, Fred B. Aftergut, Executor - Page 37

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          agreement contained a valid restriction on lifetime transfers.21            
          However, it also expressly gave any shareholder owning 75 percent           
          of the shares the right to amend the agreement.  The decedent               
          owned over 75 percent when the agreement was drafted and at all             
          times thereafter.22  Because the decedent had the unilateral                
          ability to amend the agreement, we concluded that the agreement             
          was not binding during his lifetime and disregarded it for                  
          purposes of determining the stock’s value for Federal estate tax            
          purposes.  We expressly rejected a claim that the decedent’s                
          ability to modify the agreement was limited by a fiduciary duty             
          he owed as a majority shareholder to the minority shareholders.             
               In Estate of True, the decedent was a party to a buy-sell              
          agreement, along with other shareholders and the corporation in             
          which they held stock.  The decedent had a controlling interest             
          in the corporation.  The Commissioner argued that the agreement             
          was not binding during the decedent’s lifetime because he had the           
          unilateral ability to amend the agreement by virtue of his                  

               21 The agreement required any shareholder wishing to sell              
          his shares to offer those shares first to the corporation at the            
          same price payable upon his death.                                          
               22 The agreement was later amended to increase the                     
          percentage of outstanding shares required to confer unilateral              
          amendment rights to an amount just exceeding the amount directly            
          owned by the decedent.  However, additional shares deemed owned             
          by the decedent through attribution caused him to satisfy the               
          amended higher percentage requirement.  Bommer Revocable Trust v.           
          Commissioner, T.C. Memo. 1997-380.                                          

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