-23-
3. Respondent’s Argument To Disregard Transfer
Restrictions and Purchase Option
Respondent argues alternatively that the post-reorganization
Kohler stock the estate held on the alternate valuation date
should be valued without regard to the transfer restrictions and
purchase option. See Flanders v. United States, 347 F. Supp. 95
(N.D. Cal. 1972). We disagree.
Flanders involved restrictions implemented between the date
of death and the alternate valuation date that reduced the value
of land by 88 percent. The District Court held that these
restrictions should not be considered in valuing the land,
relying on statements by a congressman on the floor of Congress
before the enactment of section 2032 that the section is intended
to address changes in value caused by market forces. Respondent
argues that we should reach a similar result here.
We look to legislative history when statutory language is
ambiguous. Blum v. Stenson, 465 U.S. 886, 896 (1984). There is
no ambiguity here and thus no need to consider legislative
history. The terms “distributed, sold, exchanged, or otherwise
disposed of” in section 2032 are explained in the regulations.
The regulations specify that “otherwise disposed of” does not
7(...continued)
of the shares to be surrendered will equal the shares to be
received in exchange). As the parties stipulated that the
reorganization was tax free, we question why respondent continues
to make this argument.
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