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conclude that the Young Property is not entitled to a fractional
interest discount.
Similarly, a lack of marketability discount arises from an
inherent difficulty in the sale of the asset. It has been
applied in determining the value of works of art and the value of
restricted securities. See, e.g., Estate of O'Keeffe v.
Commissioner, T.C. Memo. 1992-210. In regard to the Young
Property, there is no inherent difficulty in its sale. We
conclude that a lack of marketability discount is not applicable
to the Young Property.
Petitioner argues that respondent's position is based on the
unity of ownership theory; i.e., the theory that because the
surviving joint tenant succeeds to the interest of the deceased
joint tenant, there can be nothing to apply a fractional interest
discount against. We note that the unity of ownership theory has
been rejected by the courts, as in Propstra v. United States, 680
F.2d 1248 (9th Cir. 1982), but we do not characterize
respondent's position as relying on the unity of ownership
theory. Instead, we are looking at the inherent property
characteristics of joint tenancy and the approach taken by
Congress to value the property under section 2040 and section
2031.
We conclude that a fractional interest discount and a lack
of marketability discount are inapplicable to the Young Property.
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