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after decedent's death, only substituting Ms. Prechel as the
beneficiary, the interests remained partnership interests.
In determining the value of an asset for Federal estate tax
purposes, State law first determines precisely what property is
transferred. Morgan v. Commissioner, 309 U.S. 78, 80 (1940);
Estate of Bright v. United States, 658 F.2d 999, 1001 (5th Cir.
1981). After that determination is made, the Federal tax law
takes over to determine how such rights and interests will be
taxed. United States v. Bess, 357 U.S. 51, 55 (1958). Thus,
State law must be consulted to determine what property interests
were transferred at a decedent's death.
Under the Arizona Limited Partnership Act, "An assignment
entitles the assignee to receive, to the extent assigned, only
the distribution to which the assignor would be entitled." Ariz.
Rev. Stat. sec. 29-340 (1991). A partner in an Arizona limited
partnership cannot, however, confer to an assignee the rights to
exercise the powers of a partner, unless provided otherwise in
the partnership agreement. Id. The PFLP and ESNGLP partnership
agreements specify that the assignee of limited partnership
interests in either partnership will become an assignee and not a
substitute limited partner unless, among other things, the
general partners consent to the assignee's admission as a limited
partner. Accordingly, limited partner status in PFLP and ESNGLP
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