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demand a significant discount to account for that fact. Market
studies admitted into evidence indicate that appropriate lack-of-
marketability discounts often fall in a range of 25.8 to 45
percent. Certainly, the consistent history of significant cash
distributions and the history of quality management of the FC
Partnership would make the partnership an attractive investment.
There still existed, however, no public market in which to sell
ownership units in the FC Partnership, and transfer of a unit
would be subject to the approval of Mr. Silver, as owner of the
controlling units of the FC Partnership.
Because the FC Partnership was well managed and made
consistent and significant annual cash distributions, we conclude
that the appropriate discount to use in this case to reflect lack
of marketability of decedent's ownership unit in the FC
Partnership equals 26 percent.
We disagree with petitioner's expert's conclusion that a
67.5-percent combined discount rate should apply. The record
does not contain sufficient facts with regard to the July 1989
sale to Mr. Silver of a fractional interest in one ownership unit
in the FC Partnership to justify petitioner's expert's reliance
thereon.
After considering all of the facts and circumstances and
the evidence presented at trial, we conclude that the appropriate
combined discount rate to use in this case for minority interest
and lack of marketability equals 45 percent (19-percent discount
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