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Contrary to another argument raised by respondent, we do not
find donative intent in the transactions using the E&Y price to
buy and sell Huber stock. There is no evidence to support this
assertion and much evidence that is inconsistent with it. For
example, the CEO’s acceptance of an artificially low E&Y value
for Huber stock would be against both his own economic interests
and those of Huber and its shareholders. The success of this
centenarian company and the vast acceptance of the E&Y price by
its 250 shareholders strongly suggest that the sellers of E&Y
stock had every reason to believe that they were obtaining a fair
price for their shares.
Respondent argues that the lack of negotiation in the
transactions at issue connotes the lack of an intent to realize
the best price for the value of the shares. Respondent fails to
cite any caselaw that holds that negotiation is a necessary
element of an arm’s-length transaction. In fact, the weight of
authority is to the contrary. See, e.g., Kimbell v. United
States, 371 F.3d at 263 (“absence of negotiations * * * over
price or terms is not a compelling factor in the determination as
to whether a sale is bona fide, particularly when the exchange
value is set by objective factors”); Hooker Indus. v.
Commissioner, supra (stock sale deemed best evidence of value
where there was no price negotiation and parties accepted a
third-party’s valuation).
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