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fractional interests in the assets should not merge into a
100-percent fee ownership by the estate. The court stated that
"the statute does not require, nor logically contemplate that in
so passing, the QTIP assets would merge with other assets."
Estate of Bonner v. United States, supra at 198. The court also
relied on the decedent's lack of control over the disposition of
property. Id. at 198-199. The court stated:
The estate of each decedent should be required to pay
taxes on those assets whose disposition that decedent
directs and controls, in spite of the labyrinth of
federal tax fictions. * * * Mrs. Bonner controlled
the disposition of her assets, first into a trust with
a life interest for Bonner and later to the objects of
her largesse. The assets, although taxed as if they
passed through Bonner's estate, in fact were controlled
at every step by Mrs. Bonner, which a tax valuation
with a fractional interest discount would reflect. At
the time of Bonner's death, his estate did not have
control over Mrs. Bonner's interests in the assets such
that it could act as a hypothetical seller negotiating
with willing buyers free of the handicaps associated
with fractional undivided interests. The valuation of
the assets should reflect that reality. [Id. at 199.]
Respondent also argues that, in enacting sections 2056(b)(7)
and 2044, Congress did not intend to alter the estate tax
consequences that would otherwise arise if a decedent had
transferred property to his or her surviving spouse outright.
See H. Rept. 97-201, at 160 (1981), 1981-2 C.B. 352, 378 ("tax
laws should be neutral and * * * tax consequences should not
control an individual's disposition of property"). Prior to the
enactment of sections 2056(b)(7) and 2044, for the first spouse
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