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In 1987 and 1988, although lease rates for prime office
space in midtown Manhattan rose slightly each year, lease rates
remained relatively the same for secondary office space.
During these same years, vacancy rates for both primary and
secondary office space in midtown Manhattan increased.
By 1989, real estate leasing activity in midtown Manhattan
declined. By the end of 1989, New York City's economy was
experiencing a recession.
Decedent's Assignment of Ownership Unit
In January of 1986, decedent assigned to his daughter,
Muriel Clarke, a remainder interest in his one ownership unit in
the FC Partnership, retaining for the remainder of his life all
income, dividends, and distributions received in connection with
this ownership unit.
On April 15, 1986, decedent filed a Federal gift tax return
with respect to the assignment to his daughter of a remainder
interest in his one ownership unit in the FC Partnership. Using
a liquidation value for the FC partnership of $19,953,778 and a
20-percent minority interest discount, and computing the value of
the remainder interest assigned to his daughter at 82 percent of
the $168,421 value computed for the ownership unit, the remainder
interest in the ownership unit that decedent assigned to his
daughter in 1986 was valued on decedent's 1986 Federal gift tax
return at $146,302.
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Last modified: May 25, 2011