- 13 - The gift tax is not imposed upon the receipt of the property by the donee, nor is it necessarily determined by the measure of enrichment resulting to the donee from the transfer, nor is it conditioned upon ability to identify the donee at the time of the transfer.* * * Therefore, in valuing the stock petitioners transferred, we do not focus on what Sealodge actually received. However, there is authority for us to take into consideration that petitioners transferred their 45-percent interest in Sealodge as part of a prearranged plan to transfer a 100-percent controlling interest in the company. In N. Trust Co. v. Commissioner, 87 T.C. 349 (1986), four shareholders agreed to transfer each of their 25-percent noncontrolling interests in their closely held corporation to certain long-term trusts. The taxpayers contended that the minority discount should be 90 percent. However, the Court allowed only a 25-percent discount. The Court determined that the taxpayers, by following a prearranged agreement to transfer the shares simultaneously, “marched in lockstep” and that “So marching, their position was no different than that of a single majority shareholder.” Id. at 388. Here, we have a similar situation where petitioners and the two other shareholders of Sealodge had a prearranged plan to transfer their minority shares simultaneously. Therefore, we find that N. Trust Co. is instructive. Given this determination, we believe respondent’s proposed figure of 22 percent is tooPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011