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a willing seller for limited partnership interests in KFLP and
KILP.
III. Section 2704(b)--Applicable Restriction
Petitioners contend that section 2704(b) is not applicable in
this case even if the Court concludes (as we have) that petitioners
transferred limited partnership interests to the GRAT’s and to
their children. Petitioners argue that the provisions of section
10.01 of the partnership agreements do not constitute “applicable
restrictions” because: (1) The provisions do not restrict
liquidation of the partnerships within the meaning of section
2704(b)(2)(A); and (2) the university's interests in KFLP and KILP
demonstrate that the Kerr family did not have the ability
unilaterally to lift any restrictions on liquidation within the
meaning of section 2704(b)(2)(B)(ii). In the alternative,
petitioners assert that any restrictions on liquidation in the
partnership agreements are excepted from the definition of an
“applicable restriction” pursuant to section 2704(b)(3)(B) and
section 25.2704-2(b), Gift Tax Regs. Because we agree with
petitioners' contention that restrictions on liquidation in the
partnership agreements are excepted from the definition of an
“applicable restriction” pursuant to section 2704(b)(3)(B) and
section 25.2704-2(b), Gift Tax Regs., we need not consider
petitioners' remaining arguments.
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