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BEGHE, J., concurring in part and dissenting in part: I
concur in the majority’s conclusion that, in computing the value
of the gifts, the donor is not entitled to entity level
discounts; I dissent from the majority’s conclusion that
petitioner’s transfer of the leased land should be valued as
separate indirect transfers to his sons of individual 25-percent
interests, rather than as a unitary transfer to the partnership.1
With all the woofing these days about using family
partnerships to generate big discounts, the majority opinion
provides salutary reminders that the “gift is measured by the
value of the property passing from the donor, rather than by the
property received by the donee or upon the measure of enrichment
of the donee”, majority op. pp. 11-12, and that “How petitioner’s
transfers of the leased land and bank stock may have enhanced the
sons’ partnership interests is immaterial, for the gift tax is
imposed on the value of what the donor transfers, not what the
donee receives”, majority op. p. 16 (citing section 25.2511-2(a),
1 Although the majority describe the gifts as “undivided 25-
percent interests in the leased land”, majority op. p. 22, the
15-percent discounts allowed by the majority in valuing those
interests amount to no more than the discount petitioner’s
experts attributed to the transfer of a 50-percent interest.
This is because petitioner’s experts “presented no concrete,
convincing evidence as to what additional amount of discount, if
any, should be attributable to a 25-percent undivided interest as
opposed to a 50-percent undivided interest”. Majority op. note
28. For an example of an agreement by the parties as to the
difference in value between a transfer of a 50-percent block and
two 25-percent blocks of the stock of a closely held corporation,
see Estate of Bosca v. Commissioner, T.C. Memo. 1998-251.
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