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charitable contribution regulations required that taxpayers use
an appraiser who represented that he was in the business of
conducting appraisals for the general public. Mr. Kramer was not
a certified appraiser.
In addition to preparing petitioners’ returns, Mr. Kramer,
for purposes of a 1995 tax year noncash charitable contribution,
performed a September 30, 1995, valuation of Beneco. Mr.
Kramer’s valuation did not state that it was prepared for income
tax purposes or provide the date of any contributions to the
charitable donee. Mr. Kramer’s 1995 estimated fair market value
of a 100-percent interest of Beneco stock was $6,400,000, as of
September 30, 1995. In valuing petitioners’ FLPs, Mr. Kramer
simply chose to value the Beneco stock because it was the FLPs’
only asset and the valuations of the FLPs depended in great part
on the valuation of the Beneco stock. The 1995 valuation of the
Beneco stock was used for the charitable contribution deductions
of FLP interests claimed for the 1998 through 2000 tax years.
The methodology Mr. Kramer used to value the FLP interests
petitioners contributed was to obtain an appraised value of the
Beneco stock and then to discount that value for minority
interest and lack of marketability factors. No separate discount
was used with respect to the FLP interests contributed to the
charitable organization. Mr. Kramer valued the Beneco stock and
did not separately assess the value of the partnership units.
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Last modified: March 27, 2008