junior equity interest
(4) Minimum valuation of junior equity (A) In general In the case of a transfer described in paragraph (1) of a junior equity interest in a corporation or partnership, such interest shall in no event be valued at an amount less than the value which would be determined if the total value of all of the junior equity interests in the entity were equal to 10 percent of the sum of— (i) the total value of all of the equity interests in such entity, plus (ii) the total amount of indebtedness of such entity to the transferor (or an applicable family member). (B) Definitions For purposes of this paragraph— (i) Junior equity interest The term “junior equity interest” means common stock or, in the case of a partnership, any partnership interest under which the rights as to income and capital (or, to the extent provided in regulations, the rights as to either income or capital) are junior to the rights of all other classes of equity interests. (ii) Equity interest The term “equity interest” means stock or any interest as a partner, as the case may be.