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recipient of limited partnership interests would become an
assignee and not a substitute limited partner unless the general
partners consented to the assignee’s admission as a limited
partner. The Court there decided that interests in the
partnerships should be valued for estate tax purposes as assignee
interests rather than as limited partnership interests.
The transactions in Estate of Nowell differ from the gifts
in the case at hand in that the beneficiaries, the estate, and
the decedent in Estate of Nowell never treated the passing
interests in the partnerships as limited partnership interests.
The record was void of evidence that showed that a limited
partnership interest was in fact transferred. Here, the conduct
of decedent, A.C. Jones, and the daughters reflects that limited
partnership interests were actually transferred by decedent.
B. Value of the Transferred Interest in JBLP
Having concluded that decedent transferred an 83.08-percent
limited partnership interest in JBLP to A.C. Jones, the next
issue for decision is the value of the limited partnership
interest. The estate relies on the conclusions of Elliott, who
opined that the value of the interest in JBLP is subject to a
secondary market discount of 55 percent, a lack-of-marketability
discount of 20 percent, and an additional discount for built-in
capital gains. Respondent relies on the valuation of Burns, who
opined that no discounts apply.
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