- 18 -
fractional interest discounts.7 See Estate of Andrews v.
Commissioner, 79 T.C. 938 (1982) (discussing a minority
discount); Estate of Piper v. Commissioner, 72 T.C. 1062, 1084-
1086 (1979) (discussing a discount for lack of marketability for
stock); Estate of O'Keeffe v. Commissioner, T.C. Memo. 1992-210
(discussing blockage discounts for works of art); Estate of
Salsbury v. Commissioner, T.C. Memo. 1975-333 (discussing control
premiums). Petitioner bears the burden to show that respondent
was incorrect in disallowing the fractional interest discount for
the Young Property. Rule 142(a).
Section 2031 directs attention to other sections to
determine what property, and to what extent, is included in the
gross estate. Section 2033 provides that there shall be included
in the value of the gross estate the value of all property to the
extent of the decedent's interest therein at the time of his
death. Because at death the decedent does not own an interest in
joint tenancy, section 2033 is inapplicable to joint tenancy.
Section 2040(a) provides in relevant part that the value of the
gross estate shall include the value of all property to the
extent of the interest therein held as joint tenants with the
7 Minority discount normally applies with respect to the
ownership of stock comprising less than 50 percent of the voting
stock of a closely held corporation, so the owner does not have
significant control over the operations. On the other hand, a
control premium may be applicable when the block of stock
represents control of the corporation.
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011