- 27 -
value of each 1999 note was its face value of $2,232,00018 and the
self-canceling clauses should be given no effect.
Petitioner contends generally that the promissory notes used
to pay for the stock were not self-canceling because they were
ambiguous on that point. We disagree. The notes unambiguously
provided that they were self-canceling.
Petitioner contends that we should reform the 1999 notes
because inclusion of the self-canceling clauses was a drafting
mistake. We disagree. Rosenberg testified that he drafted the
1999 notes and that he meant for the self-canceling clauses to
require the 1999 notes to be deemed paid if petitioner died
before they were paid. Holt testified that the intent of the
clauses was to treat the unpaid portion of the notes as a gift
from petitioner to his sons in the event of petitioner’s death.
Holt’s testimony is corroborated by a memorandum to his file
dated September 28, 1999.
Petitioner cites cases which involve typographical errors.
See, e.g., Woods v. Commissioner, 92 T.C. 776 (1989); Buchine v.
Commissioner, T.C. Memo. 1992-36, affd. 20 F.3d 173 (5th Cir.
1994); Atkinson v. Commissioner, T.C. Memo. 1990-37. Those cases
have no bearing here because this case involves no typographical
errors. Petitioner may not disavow the self-canceling clauses.
18 Petitioner offered no evidence about the value of the
1999 notes.
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