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the Tax Court and allowed the marketability discount. In
allowing a marketability discount, the Court of Appeals reasoned
that the “right to transfer is ‘one of the most essential sticks
in the bundle of rights that are commonly characterized as
property,’ and that an asset subject to marketability
restrictions is, as a rule, worth less than an identical item
that is not so burdened.” Id. at 88 (quoting Shackleford v.
United States, supra at 1032).
The estate’s analogy fails to recognize a fundamental
difference between the installment payments in a lottery prize
and securities in an IRA. Lottery payments are classified as
annuities. Estate of Gribauskas v. Commissioner, 116 T.C. 142
(2001), revd. on other grounds 342 F.3d 85 (2d Cir. 2003). The
restriction on marketability in both Shackleford and Gribauskas
applied to each constituent payment within the entire prize.
IRAs, however, are trusts composed of marketable assets. See
sec. 408(a), (h). As we have already discussed, the underlying
assets of the IRAs are publicly traded securities that have no
such marketability restrictions. Therefore, Shackleford and
Gribauskas do not support a marketability discount in this case.
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