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by the property received by the donee or upon the measure of
enrichment to the donee. See sec. 25.2511-2(a), Gift Tax Regs.
For gift tax purposes, the value of the transferred property
is generally the “price at which the property would change hands
between a willing buyer and a willing seller, neither being under
any compulsion to buy or to sell and both having reasonable
knowledge of relevant facts.” United States v. Cartwright, 411
U.S. 546, 551 (1973); see sec. 25.2512-1, Gift Tax Regs.
The determination of property value for gift tax purposes is
an issue of fact, and all relevant factors must be considered.
See Anderson v. Commissioner, 250 F.2d 242, 249 (5th Cir. 1957),
affg. in part and remanding T.C. Memo. 1956-178; LeFrak v.
Commissioner, T.C. Memo. 1993-526.
B. The Parties’ Contentions
The parties disagree about the characterization, for gift
tax purposes, of petitioner’s transfers of the leased land and
bank stock. The parties also disagree about the fair market
value of the leased land at the time petitioner transferred it.
In addition, the parties disagree as to what valuation discounts
should apply to petitioner’s transfer of the leased land and bank
stock. The nub of the parties’ disagreement in this last regard
is whether petitioner’s transfers to the partnership should
reflect minority and marketability discounts attributable to the
sons’ minority-interest status in the partnership.
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