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economic substance, a judicial doctrine. Likewise, we need not
address respondent’s contentions with respect to gift tax
liability, as those determinations were made in the alternative
to full inclusion based on either section 2036(a) or the economic
substance doctrine. Accordingly, we now turn to valuation of the
assets to be included in the gross estate.
IV. Valuation
A. Introduction and General Rules
Given our resolution above, the valuation inquiry with which
we are concerned is the value on February 1, 1995, decedent’s
date of death, of the property previously transferred by decedent
to the partnership. In other words, we must ascertain the value
of HFLP’s underlying portfolio assets, without regard to any
claimed discounts attributable to the partnership form.
As used in transfer tax statutes, value denotes fair market
value, meaning “the price at which the property would change
hands between a willing buyer and a willing seller, neither being
under any compulsion to buy or to sell and both having reasonable
knowledge of relevant facts.” Sec. 20.2031-1(b), Estate Tax
Regs. Both parties submitted expert reports in support of their
contentions regarding the fair market value of all property held
by the partnership, referred to as HFLP’s net asset value. Clint
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