« iepriekšējāTurpināt »
If considered, the payment stream, however contingent,
as to time. $2701(b)(1)(A) (i). It presumably could be
in 52701(b) (4) (B)(ii) to $2701(b)(1)(A). 26. Grandparent owns preferred. Parent owns common. Parent
gives some common to child. Grandparent is incapaci-
subsequent gift tax.
actions as long as they are properly valued and to
contingency, GRIT's and joint purchases.
corporation, as well as some publicly traded preferred.
preferred should be exempted.
preferred and 20% of common and gives 10% of common to
In the past, grandfather left common stock 50% to parent;
The agreement was entered into 10 years prior to
of such property as of the time of such sale, the buy-
SUGGESTION: Impose no new limits on buy-sell agreements. 34. The buy-sell agreement between shareholders and the
corporations provides for a formula arriving at a
33-144 0 - 90 - 4
STATEMENT OF E. JAMES GAMBLE, CHAIRMAN, ESTATE AND
GIFT TAX COMMITTEE, AMERICAN COLLEGE OF TRUST AND ESTATE COUNSEL, ACCOMPANIED BY WALLER H. HORSLEY, PRESIDENT, AND THOMAS P. SWEENEY, VICE PRESIDENT
Mr. GAMBLE. I am James Gamble, an attorney practicing in Detroit, MI.
I appear in my capacity as chairman of the Estate and Gift Tax Committee of the American College of Trust and Estate Counsel.
With me are Waller Horsley of Richmond, Virginia, president of the college and Thomas Sweeney of Wilmington, DE, who is vice president of the college.
We want to express our appreciation to the committee for the process you have provided us in making the discussion draft public and for permitting us to examine it, prepare comments and to submit the comments to you this morning.
The college supports the committee's effort to stop abusive valuation freezes. We support the approach used in the discussion draft in treating this as a gift tax valuation problem.
We wholeheartedly support the proposed repeal of section 2036(c) because we think that has been a disaster by and large and is bad legislation that should be repealed. We do feel that chapter 14 is too broad and complex. And we prefer the joint task force report that Mr. Wallace and Mr. McGaffey described to you because that would be simpler and less intrusive in the everyday affairs of small businesses than chapter 14.
I want to give you three examples of what we perceive to be some of the particularly complex areas raised by chapter 14. The first is that it applies to people who do not control the small businesses. Its threshold of 10 percent ownership is exceedingly low. People who own only 10 percent of a business are not in a position to engage in abusive freezes. They do not control the business. They also do on occasion, however, lend money to small corporations in which they own property. They also lease property to it, and this bill would impose upon them the burden of trying to de termine each time they want to make a gift of common stock to a member of their family whether or not they are subject to the provisions of this act.
It will require them to bring in a battery of lawyers and accountants to analyze it for them. It will be extremely costly. They may decide chapter 14 does or does not apply. It is just not worthwhile to make chapter 14 apply to people who are not the controlling forces behind the corporations.
Chapter 14 would also apply to people who own more than 10 percent of an interest in a publicly owned corporation. These people, again, do not control the course of the publicly owned corporation.
There seems to be no useful point in applying chapter 14 to them because they just are not in a position to install an abuse valuation freeze, which is what this is all about, in a publicly owned corporation.
Secondly, the discussion draft ignores the fact that market values may be readily available to be used for gift tax purposes.