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Within the class of (1+2)-dimensional ultraparabolic linear equations, we distinguish a fine Kolmogorov backward equation with a quadratic diffusivity. Modulo the point equivalence, it is a unique equation within the class whose essential Lie invariance algebra is five-dimensional and nonsolvable. Using the direct method, we compute the point symmetry pseudogroup of this equation and analyze its structure. In particular, we single out its essential subgroup and classify its discrete elements. We exhaustively classify all subalgebras of the corresponding essential Lie invariance algebra up to inner automorphisms and up to the action of the essential point-symmetry group. This allowed us to classify Lie reductions and Lie invariant solutions of the equation under consideration. We also discuss the generation of its solutions using point and linear generalized symmetries and carry out its peculiar generalized reductions. As a result, we construct wide families of its solutions parameterized by an arbitrary finite number of arbitrary solutions of the (1+1)-dimensional linear heat equation or one or two arbitrary solutions of (1+1)-dimensional linear heat equations with inverse square potentials.