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RUWE, J., concurring in part and dissenting in part: I
agree with the majority opinion except for its allowance of a 15-
percent valuation discount with respect to what the majority
describes as “indirect gifts [by petitioner] to each of his sons,
John and William, of undivided 25-percent interests in the leased
land”. Majority op. p. 22. In my opinion, no such discount is
appropriate because undivided interests in the leased land were
never transferred to petitioner’s sons. The transfer in question
was a transfer of petitioner’s entire interest in the leased land
to the partnership. This transfer was to a partnership in which
petitioner held a 50-percent interest. Except for enhancing the
value of petitioner’s 50-percent partnership interest, he
received no other consideration for the transfer.
Section 2512(b) provides:
SEC. 2512. Valuation of Gifts.
(b) Where property is transferred for less than an
adequate and full consideration in money or money’s
worth, then the amount by which the value of the
property exceeded the value of the consideration shall
be deemed a gift, and shall be included in computing
the amount of gifts made during the calendar year.
The Supreme Court has described previous versions of the
gift tax statutes (section 501 imposing the tax on gifts and
section 503 which is virtually identical to present section
2512(b)) in the following terms:
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