T.C. Memo. 2005-126
UNITED STATES TAX COURT
ESTATE OF CHARLES PORTER SCHUTT, DECEASED,
CHARLES P. SCHUTT, JR., AND HENRY I. BROWN III, CO-EXECUTORS,
Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 19208-02. Filed May 26, 2005.
S1 and S2, Delaware business trusts, were formed
in 1998 and were capitalized by the contribution
thereto of stock by D through a revocable trust and by
WTC as trustee of various trusts created for the
benefit of D’s children and grandchildren. At his
death in 1999, D held through the revocable trust a
45.236-percent interest in S1 and a 47.336-percent
interest in S2.
Held: D’s transfers of stock to S1 and S2 were
bona fide sales for adequate and full consideration
within the meaning of secs. 2036(a) and 2038, I.R.C.,
such that the value of the transferred assets is not
included in his gross estate under these statutes.
John W. Porter, W. Donald Sparks II, and Michael R. Stein,
for petitioner.
Gerald A. Thorpe, for respondent.
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