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MEMORANDUM FINDINGS OF FACT AND OPINION
COLVIN, Chief Judge: Respondent determined deficiencies in
petitioner’s gift tax of $1,715,526 for 1999 and $823,160 for
2000.1
Petitioner transferred about 55 percent of the nonvoting
stock of the Dallas Group of America, Inc. (DGA), an S
corporation the stock of which is not publicly traded, to trusts
established for the benefit of his sons (the trusts) in exchange
for cash and promissory notes signed by his sons. The transfers
occurred on November 29, 1999 and 2000. Petitioner and his sons
agreed to be bound by a value for DGA stock as estimated in a
third-party appraisal. Each promissory note used to pay for the
stock at issue in 1999 provides it is deemed paid if petitioner
dies before it is paid. Respondent determined that the
transactions were bargain sales and thus were gifts. The issues
for decision are:
1. Whether the value of the DGA stock at issue on November
29, 1999, was $907 as respondent determined or $620 as petitioner
contends; and whether the value of the DGA stock at issue on
November 29, 2000, was $906 as respondent determined or $650 as
petitioner contends. We hold that the fair market value of the
1 Amounts are rounded to the nearest dollar.
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