; valuation rules for certain transfers of nonbusiness assets (a) Limitation on discount by reason of family control (1) In general For purposes of this subtitle, in the case of the transfer of any interest in an entity other than an interest which is actively traded (within the meaning of section 1092), if the transferor, the transferee, and members of the family of the transferor and transferee have control of such entity immediately before such transfer, no discount shall be allowed— (A) by reason of the fact that the transferor or transferee does not have control of such entity, (B) by reason of the lack of marketability of the interest, or (C) for any other reason. (2) Definitions In this subsection, the terms control and member of the family have the same meanings given such terms in section 2704(c). (3) Attribution For purposes of this section, the rule of section 2701(e)(3) shall apply for purposes of determining the interests held by any individual. (b) Valuation rules for certain transfers of nonbusiness assets (1) In general For purposes of this subtitle, in the case of the transfer of any interest in an entity other than an interest which is actively traded (within the meaning of section 1092)— (A) the value of any nonbusiness assets held by the entity with respect to such interest shall be determined as if the transferor had transferred such assets directly to the transferee (and no valuation discount shall be allowed with respect to such nonbusiness assets), and (B) such nonbusiness assets shall not be taken into account in determining the value of the interest in the entity. (2) Nonbusiness assets For purposes of this subsection— (A) In general The term nonbusiness asset means any asset other than an asset which is used in the active conduct of a trade or business. (B) Passive assets treated as nonbusiness assets (i) In general For purposes of subparagraph (A), a passive asset shall be treated as a nonbusiness asset unless— (I) the asset is property described in paragraph (1) or (4) of section