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interests in the partnership that petitioners transferred under
Texas law. We do not disregard the partnership because we have
no reason to conclude from this record that a hypothetical buyer
or seller would disregard it.
Respondent relies on several income tax economic substance
cases. See, e.g., Frank Lyon Co. v. United States, 435 U.S. 561,
583-584 (1978); Knetsch v. United States, 364 U.S. 361, 366
(1960); ASA Investerings Partnership v. Commissioner, 201 F.3d
505, 511-516 (D.C. Cir. 2000), affg. T.C. Memo. 1998-305; ACM
Partnership v. Commissioner, 157 F.3d 231, 248 (3d Cir. 1998),
affg. in part and revg. in part T.C. Memo. 1997-115; Merryman v.
Commissioner, supra; Winn-Dixie Stores, Inc. v. Commissioner, 113
T.C. 254, 278 (1999). We disagree that those cases require that
we disregard the partnership here because the issue here is what
is the value of the gift. See secs. 2501, 2503; sec. 20.2031-
1(b), Estate Tax Regs.; sec. 25.2512-1, Gift Tax Regs.
Respondent points out that in several transfer tax cases we
and other courts have valued a transfer based on its substance
instead of its form. See, e.g., Heyen v. United States, 945 F.2d
359, 363 (10th Cir. 1991); Schultz v. United States, 493 F.2d
1225 (4th Cir. 1974); Estate of Murphy v. Commissioner, T.C.
Memo. 1990-472; Griffin v. United States, 42 F. Supp. 2d 700, 704
(W.D. Tex. 1998). Our holding is in accord with those cases
because we believe the form of the transaction here (the creation
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