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The Court of Appeals for the Ninth Circuit considered the
language of sections 2031 and 2033, along with the accompanying
regulations, and decided that Congress did not intend to have
"unity of ownership" principles apply to property valuation for
estate tax purposes. Id. The court stated:
By no means is * * * [the language of section 20.2031-
1(b)] an explicit directive from Congress to apply
unity of ownership principles to estate valuations. In
comparison, Congress has made explicit its desire to
have unity of ownership or family attribution
principles apply in other areas of the federal tax law.
See, e.g., I.R.C. secs. 267, 318, and 544. In the
absence of similarly explicit directives in the estate
tax area, we shall not apply these principles when
computing the value of assets in the decedent's estate.
[Id. at 1251.]
The court concluded that the decedent's fractional interest in
the subject property should be valued separately from the
accompanying fractional interest held by the surviving spouse,
upholding the 15-percent discount. Id. at 1253.
Respondent argues that decedent's situation is
distinguishable from Propstra because all of the property to be
aggregated in this case is included in decedent's estate. The
FOH shares in the Harriett trust are included pursuant to section
2033, and FOH shares in the QTIP trust are included pursuant to
section 2044. Thus, respondent contends that decedent is
considered to be the owner of all of these shares outright for
purposes of valuation, in which case the shares should be valued
as one 55.7-percent ownership block. Respondent concludes that,
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