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willing buyer would be obtaining the securities free and clear of
any burden. We have taken note of the fact that the IRAs
themselves are not marketable. Therefore, in determining their
value under the willing buyer-willing seller test, we must take
into account what would actually be sold--the securities. In
Davis v. Commissioner, 110 T.C. 530 (1998), and Eisenberg v.
Commissioner, 155 F.3d 50 (2d Cir. 1998), vacating T.C. Memo.
1997-483, the interest in the entity was the subject of the
hypothetical sale. Therefore, the courts in those cases
rightfully considered the tax liabilities and marketability
restrictions accompanying those interests. Here, however, we
look through into the underlying assets of the entity because the
assets are what would actually be sold, not the interest in the
IRAs.
Further, the distribution of the IRAs is not a prerequisite
to selling the securities. Any tax liability that the
beneficiary would pay upon the distribution of the IRAs would not
be passed onto a willing buyer because the buyer would not
purchase the IRAs as an entity because of their transferability
restrictions. Rather, a willing buyer would purchase the
constituent assets of the IRAs. Therefore, unlike all of the
cases the estate cites, the tax liability is no longer a factor.
Further, the lack of marketability is no longer a factor because
a hypothetical sale would not examine what a willing buyer would
pay for the unmarketable interest in the IRAs but instead would
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