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(i) Corporations.–-Ownership of a
corporation shall be determined by the
holding of stock * * *
(ii) Partnerships.–-Ownership of a
partnership shall be determined by the
owning of the appropriate percentage of
the capital interest in such
partnership.
If an estate claims and qualifies for a QFOBI deduction
under section 2057(a), but if, within 10 years after the
decedent’s death, a qualified heir of the decedent disposes of
any portion of a QFOBI, a recapture tax relating to the QFOBI
deduction the estate claimed on its Federal estate tax return is
triggered. Sec. 2057(f)(1)(B).
As noted, throughout section 2057 words expressly denoting
equity ownership are used. Immediately preceding section
2057(e)(1)(B) is the express limitation on a sole proprietor’s
interest that (for purposes of the liquidity test of section
2057(b)(1)(C)) will be taken into account to that of “a
proprietor”. See sec. 2057(e)(1)(A). In addition, in section
2057(e)(3)(A) and (B) express references to “equity” interests
are made by use of the words “stock”, “capital”, and “ownership
interest in”.
Petitioners argue that the absence in the language of
section 2057(e)(1)(B) of an express limitation on the word
“interest” (e.g., to a “capital” interest or to an “equity”
interest) that (for purposes of the liquidity test of section
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Last modified: March 27, 2008