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as the property transferred by virtue of each of the deemed
separate gifts. Otherwise, we must construe section 2512(b) to
apply not on a gift-by-gift basis, but on the basis of aggregate
gifts made by the donor to different donees–-a result without
basis in law or common sense.
It would seem beyond cavil that if the petitioner had made
direct gifts to his sons of 25-percent undivided interests in the
land, we would permit appropriate fractional interest discounts
in valuing the gifts. It would be anomalous if by making the
same gifts indirectly, through a partnership, instead of
directly, such fractional interest discounts were precluded.
Having applied the indirect gift rule to deny the donor entity-
level discounts on the basis that the transfer to the entity was
in essence multiple transfers to the individual objects of the
donor’s bounty, it would be unfair then to ignore the operation
of that rule in concluding that in considering the availability
of a fractional interest discount, the transfer should be treated
as a unitary transfer to the entity.
Finally, it is true, as Judge Ruwe notes, that neither
Kincaid nor several of its progeny allowed any fractional
interest discount with respect to the transferred property.
There is no indication in any of these cases, however, that the
taxpayer raised or that the court considered such an issue. The
only case in the Kincaid line of cases to expressly consider the
issue was Estate of Bosca v. Commissioner, T.C. Memo. 1998-251,
which concluded, consistent with the majority opinion, that
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