Estate of H.A. True, Jr. - Page 133




                                       - 211 -                                        
              The Kimball reports determined the so-called hypothetical               
          fair market value of the subject interests by ignoring the book             
          value buy-sell price, but otherwise regarding all other                     
          provisions of the buy-sell agreements.  Mr. Kimball factored the            
          buy-sell agreement terms into his determination of both entity              
          values and marketability discounts.  This is a major flaw in                
          methodology that reduces the reliability of the conclusions of              
          the Kimball reports.                                                        
              While we ignore buy-sell restrictions for valuation purposes            
          if they are deemed to be testamentary devices, we do not ignore             
          State law transfer restrictions.  In determining the value of an            
          asset for transfer tax purposes, State law determines what                  
          property is transferred.  See Morgan v. Commissioner, 309 U.S.              
          78, 80 (1940); Estate of Bright v. United States, 658 F.2d 999,             
          1001 (5th Cir. 1981); Estate of Nowell v. Commissioner, T.C.                
          Memo. 1999-15.  Under the Wyoming Uniform Partnership Act (WUPA),           
          a person may become a partner only with the consent of all                  
          partners.  See Wyo. Stat. Ann. sec. 17-21-401(j) (Michie 1999).68           
          A partner’s only transferable interest in the partnership is his            
          or her interest in distributions.  See Wyo. Stat. Ann. sec. 17-             
          21-502(a) (Michie 1999).  The transfer, in whole or in part, of a           
          partner’s transferable interest does not entitle the transferee             


               68All referenced sections of the Wyoming Uniform Partnership           
          Act (WUPA) were in effect at the time of the subject transfers in           
          1993 and 1994.                                                              





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