Pope & Talbot, Inc., & Subsidiaries - Page 43

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          interests.  Estate of Jung v. Commissioner, supra at 442-443                
          n.11.  Limited partnership interests may be analogized to a stock           
          interest in this respect.  Harwood v. Commissioner, supra.                  
          Similarly, courts have recognized a fractional interest discount            
          in valuing undivided interests, particularly when valuing real              
          property.  Estate of Bonner v. United States, 84 F.3d 196, 197-             
          198 (5th Cir. 1996); Estate of Fawcett v. Commissioner, 64 T.C.             
          889, 900-901 (1975).  The discount is an acknowledgment of the              
          restrictions on sale or transfer of property, when more than one            
          individual or entity holds undivided fractional interests.                  
          Estate of Bonner v. United States, supra; Estate of Fawcett v.              
          Commissioner, supra.                                                        
               We believe that such a discount was reflected in the trading           
          price of the partnership units.  The units that were being traded           
          were limited partnership units.  Limited partners in the                    
          Partnership had no management power, limited voting rights, and             
          significant limitations on their power to remove the managing               
          general partner.  Moreover, the units were newly issued.  The               
          value of the assets that had just been transferred to the                   
          Partnership was uncertain as evidenced by the large variance in             
          the values assigned to them by the various experts in this                  
          case.18  In addition, most of the underlying assets consisted of            


          18This uncertainty is also reflected in the value estimates                 
          that were made for petitioner prior to transferring the                     
          Washington properties.                                                      




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