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as a hypothetical seller, rather the estate or any of decedent's
beneficiaries. Id. at 1251-1252.
In Propstra, the court allowed a fractional interest
discount for community property. Contrary to petitioner's
arguments, we find the situation presented in Propstra is not
analogous to the current situation involving joint tenancy.
First, Propstra dealt with section 2033, which provides that
the value of the gross estate shall include the value of all
property to the extent of the interest therein held by the
decedent at the time of his death, and not section 2040, the
relevant provision in our case. Section 2033 looks to the
interest held by the decedent at his death. With community
property, each spouse owns a present vested one-half interest in
the community property. Their respective interests in such
property are individually wholly owned (that is, separate
property), so that the decedent has no interest, title or
ownership, marital or otherwise, in the other's interest in the
community property. As a result under section 2033, one-half of
the value of property held as community property (that being the
decedent's interest in the property) is includable in a
decedent's gross estate, and the surviving spouse's one-half of
the value is excluded from decedent's gross estate. In light of
this, Propstra v. United States, supra, looked at the undivided
one-half interest held by the decedent at his death.
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