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Partnership Reported Respondent's
Year Interest Value Determination
1994 KFLP $38,050 1$1,636,420
1994 KILP 12,411 16,547
1995 KILP 17,440 13,080
1 A substantial portion of the difference between the value
that petitioners reported for this item and the value that
respondent determined is attributable to the sec. 2702(b) issue
that respondent subsequently conceded.
Respondent determined in pertinent part that the restrictions on
liquidation set forth in section 10.01 of the KFLP and KILP
partnership agreements constitute “applicable restrictions” within
the meaning of section 2704(b), and that these restrictions should
have been disregarded in valuing the limited partnership interests.
Procedural History
After petitioners filed a timely joint petition for
redetermination, and respondent filed an answer to the petition,
petitioners filed the motion for partial summary judgment currently
pending before the Court. Petitioners raise several alternative
arguments in support of their position that respondent erred in
applying section 2704(b) in this case. Petitioners' primary
contention is that the interests that they transferred to the
GRAT’s trustees were merely assignee interests. In connection with
this argument, petitioners maintain that section 2704(b) does not
apply to the valuation of the transferred interests because the
limited rights of assignees under the partnership agreements are no
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