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of the FC Partnership, and respondent's expert concludes that the
appropriate minority interest discount of only 15 percent
applies.
With respect to the discount for lack of marketability,
respondent's expert also relies on various market studies which
indicate appropriate discounts of between 25.8 and 45 percent for
lack of marketability. Because the FC Partnership appeared to
have been well managed, made regular cash distributions, and had
quality tenants, respondent's expert concludes that a 15-percent
discount for lack of marketability is appropriate. Combining the
two discounts, respondent's expert uses a 28-percent discount to
calculate the December 31, 1989, fair market value of decedent's
ownership unit. Applying this 28-percent discount to the
$825,307 per-unit liquidation value that respondent's expert
calculates for each ownership unit, respondent's expert concludes
that the date-of-death value of decedent's ownership unit equals
$594,221.
In our opinion, with regard to the appropriate minority
interest discount to apply, respondent's expert erroneously
assumes that an owner of each general partnership unit could
participate meaningfully in management of the FC Partnership.
Since Mr. Silver controlled a majority of the FC Partnership
units, he had practical control over management and operation of
the FC Partnership, and holders of minority interests in the FC
Partnership would have only limited veto power over the few
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