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Pursuant to section 25.2512-1, Gift Tax Regs., the value of the
gift is the price at which such property would change hands between
a willing buyer and a willing seller, neither being under any
compulsion to buy or sell, and both having reasonable knowledge of
relevant facts. See United States v. Cartwright, 411 U.S. 546, 551
(1973).
In the Omnibus Budget Reconciliation Act of 1990 (OBRA 1990),
Pub. L. 101-508, sec. 11602(a), 104 Stat. 1388-491, Congress
enacted a series of special valuation rules applicable to transfers
of interests in corporations, partnerships, and trusts. One of
these provisions, section 2704(b), provides:
SEC. 2704(b). Certain Restrictions on Liquidation
Disregarded.--
(1) In general.--For purposes of this subtitle, if–
(A) there is a transfer of an interest
in a corporation or partnership to (or for the
benefit of) a member of the transferor's
family, and
(B) the transferor and members of the
transferor's family hold, immediately before
the transfer, control of the entity,
any applicable restriction shall be disregarded in
determining the value of the transferred interest.
(2) Applicable restriction.--For purposes of
this subsection, the term “applicable restriction”
means any restriction–-
(A) which effectively limits the ability
of the corporation or partnership to
liquidate; and
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