- 16 -
1997, stock subscription transaction; (3) the 4,000 shares and
the $400,000 demand note payable to Advance Leasing were not
reflected on Advance Leasing’s 1997 and 1998 financial statements
or on its 1997 and 1998 tax returns; (4) Advance Leasing’s
bookkeeper and its certified public accountant did not know about
the stock subscription agreement and the $400,000 note payable,
and (5) Advance Leasing and McBride (its sole officer and
director) did not demand payment of the $400,000 before August
20, 1999.
After decedent died, Advance Leasing received and used the
proceeds to repay $400,000 to HELP, the family partnership in
which certain children and grandchildren of decedent and
decedent’s husband collectively held a 99.419-percent interest.
Considering all the circumstances, we conclude that the stock
subscription agreement was a substitute for a testamentary
disposition to decedent’s children and grandchildren.9
9 The estate contends that we should not treat the $400,000
payment as a testamentary disposition because, if decedent had so
intended, she could have reduced her estate by $140,000 per year
by giving $10,000 to each of her 14 children and grandchildren
each year. Regardless of how decedent might have done things
differently, we evaluate the facts before us. See Commissioner
v. Natl. Alfalfa Dehydrating & Milling Co., 417 U.S. 134, 148-149
(1974).
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011