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is conferred on Mr. Prechel and Ms. Prechel only if the general
partners consent.
Under the partnership agreements, the assignee of a general
partnership interest is a general partner with respect to such
assignment if "at the time of such * * * [assignment, the
assignee] is otherwise a General Partner". If the assignee of a
general partnership interest is not a general partner, the
assignee will become a substitute general partner only if
approved by a majority of the partners. Because Mr. Prechel was
already a general partner in PFLP, the 408,000 general
partnership units in PFLP assigned to him continued to be a
general partnership interest.
Applying the Federal estate tax valuation principles to the
interests described above, the limited partnership interests must
be valued as "assignee" interests, and the general partnership
interest in PFLP distributed to Mr. Prechel must be valued as a
general partnership interest. Determination of whether
Mr. Prechel and Ms. Prechel will be treated as limited partners
of the respective partnerships can be made only by taking into
consideration whether the remaining general partners will consent
to their admission as limited partners, subjective factors that
cannot be taken into consideration under the objective standard
of the hypothetical seller/buyer analysis. See Propstra v.
United States, supra at 1252; Estate of Andrews v. Commissioner,
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Last modified: May 25, 2011