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reported a gift of a 0.6-percent general partnership interest and
a 36-percent Class B limited partnership interest in the
partnership to Ms. Factor with values as of the date of the gifts
of $9,600 and $345,600, respectively.
On February 1, 1995, decedent died. On the Federal Estate
Tax return filed for decedent's estate on November 2, 1995,
decedent's estate reported a 39-percent Class A limited
partnership interest in the partnership with a value at the date
of death of $410,100.
We must decide whether, as respondent contends, the
restrictions on the right to liquidate the partnership contained
in the partnership agreement are applicable restrictions within
the meaning of section 2704 and are accordingly to be disregarded
when valuing the shares of the partnership. Petitioner contends
that the restrictions on the right to liquidate the partnership
contained in the partnership agreement are not more restrictive
than the default restrictions of California law which would apply
in absence of a partnership agreement. Accordingly, petitioner
argues that such restrictions are not applicable restrictions
within the meaning of section 2704.
Section 2704(b) provides:
SEC. 2704(b). Certain Restrictions on Liquidation
Disregarded.--
(1) In general.--For purposes of this subtitle, if--
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