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were decided on the basis of a specific regulation dealing with
blockage discounts and involved either separate transfers of
properties to various persons or transfers in trust where the
transferor allocated specific properties to the trust accounts of
individual donees. See Rushton v. Commissioner, 498 F.2d 88 (5th
Cir. 1974), affg. 60 T.C. 272 (1973); Calder v. Commissioner, 85
T.C. 713 (1985). In the instant case, there was a single
transfer of petitioner’s property for less than full and adequate
consideration. Pursuant to section 2512(b), such a transfer is
deemed to be a gift to the extent the fair market value of the
transferred property exceeded the value of any consideration
received by the transferor.
The value of the property to which the gift tax applies in the
instant case is the fair market value of the leased property that
petitioner transferred to the partnership, minus the portion of
that value that served to enhance petitioner’s 50-percent
partnership interest. See Kincaid v. United States, supra at
1224; Heringer v. Commissioner, 235 F.2d at 152-153;4 Ketteman
Trust v. Commissioner, 86 T.C. at 104. There is nothing in that
formula that would justify a discount for two 25-percent
4In Heringer v. Commissioner, 235 F.2d 149 (9th Cir. 1956),
the taxpayers held a 40-percent interest in the corporation to
which they transferred property. The taxpayers argued that any
gift should not exceed 60-percent of the value of the transferred
property because the taxpayers’ 40-percent stock interest was
increased proportionately by the transfer and that such increase
was analogous to receipt of consideration. The Court of Appeals
agreed citing sec. 1002, 1939 I.R.C., which contains the same
language as the current version of sec. 2512(b). See id. at 152-
153.
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