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HALPERN, J., concurring: I write to state my agreement
with the majority opinion and to respond to the suggestion that
in allowing a fractional interest discount with respect to the
leased land, the majority opinion has deviated from the valuation
rule of section 2512(b). The threshold question under section
2512(b) is what “property is transferred”. As germane to the
facts of the case under review, the question is whether
petitioner’s transfer of land to the partnership should be deemed
to represent a single transfer of petitioner’s 100-percent
interest in the land, or whether it should be viewed as separate,
indirect transfers of fractional interests to his two sons.
The instant case, like Kincaid v. United States, 682 F.2d
1220 (5th Cir. 1982), is based on application of an indirect gift
rule as provided in the regulations: “A transfer of property by
B to a corporation [for less than full and adequate
consideration] generally represents gifts by B to the other
shareholders of the corporation to the extent of their
proportionate interests in the corporation.” Gift Tax Regs.
sec. 25.2511-1(h)(1) (emphasis added). Applying this regulation,
the court in Kincaid concluded that the taxpayer’s single
transfer of a ranch to the family-owned corporation represented
“a gift to each of her sons” to the extent of their proportionate
interests. Id. at 1224. Given the unambiguous premise of the
cited regulation, as applied in Kincaid, that the transfer gives
rise to separate “gifts”, it follows that for purposes of valuing
those separate gifts, the “property transferred” should be viewed
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