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(1984), affd. without published opinion 786 F.2d 1174 (9th Cir.
1986); Mandelbaum v. Commissioner, T.C. Memo. 1995-255, affd.
without published opinion 91 F.3d 124 (3d Cir. 1996); Moore v.
Commissioner, T.C. Memo. 1991-546.
Petitioner's and respondent's experts use similar basic
steps to value decedent's ownership unit in the FC Partnership.
The experts: (1) Estimate the December 31, 1989, fair market
value of the underlying Partnership Properties; (2) convert that
value into a partnership liquidation value; (3) divide the
partnership liquidation value by 95 to calculate the liquidation
value of decedent’s one ownership unit; and (4) apply their
respective combined minority-interest and lack-of-marketability
discounts to the liquidation value of decedent's one ownership
unit.
The major points of disagreement between petitioner's and
respondent's experts relate to the fair market value of the
underlying Partnership Properties and to the amount of the
discounts to apply that would approximately reflect the minority
status and lack of marketability of decedent's ownership unit.
The schedule below summarizes each of the experts'
valuations of the underlying Partnership Properties as of
December 31, 1989, the discounts they apply, and their respective
ultimate date-of-death valuations of decedent's ownership unit in
the FC Partnership:
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