Estate of Trenchard v. Commissioner

Ds, their daughter, and her three children each transferred property to a newly formed, closely held corporation, C, in exchange for debt and stock. Ds received most of C's preferred stock, which gave them approximately 61 percent of C's voting power; their daughter received C's remaining preferred stock and 40 percent of its common stock, which gave her approximately 35 percent of C's voting power; each of the three children received 20 percent of C's common stock, which gave each of them approximately 1 percent of C's voting power. The value of the property that each D transferred to C…