Estate of George C. Blount, Deceased, Fred B. Aftergut, Executor - Page 49

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          Thus, Congress contemplated that business “comparables” that                
          established “the general practice of unrelated parties” would               
          constitute the evidence satisfying section 2703(b)(3), and that             
          “expert testimony” could be used for this purpose.                          
               The regulations under section 2703 also contemplate the                
          introduction of evidence of actual comparable transactions.                 
          Section 25.2703-1(b)(4), Gift Tax Regs., provides in relevant               
                    (4) Similar arrangement. (i) In general.  A right                 
               or restriction is treated as comparable to similar                     
               arrangements entered into by persons in an arm’s length                
               transaction if the right or restriction is one that                    
               could have been obtained in a fair bargain among                       
               unrelated parties in the same business dealing with                    
               each other at arm’s length.  A right or restriction is                 
               considered a fair bargain among unrelated parties in                   
               the same business if it conforms with the general                      
               practice of unrelated parties under negotiated                         
               agreements in the same business.  * * *                                
                    (ii) Evidence of general business practice.                       
               Evidence of general business practice is not met by                    
               showing isolated comparables.  * * *  It is not                        
               necessary that the terms of a right or restriction                     
               parallel the terms of any particular agreement.  If                    
               comparables are difficult to find because the business                 
               is unique, comparables from similar businesses may be                  
               In light of the statutory language, the legislative history,           
          and the regulations, we conclude that section 2703(b)(3) requires           
          a taxpayer to demonstrate that the terms of an agreement                    
          providing for the acquisition or sale of property for less than             
          fair market value are similar to those found in similar                     

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