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typically see with respect to an expert’s opinion of valuation,
Mr. Alerding’s report is three pages long and consists mainly of
bald assertions that a 25-percent marketability discount is
warranted. His report contains no meaningful discussion of any
of the factors of valuation; it does not reflect a review of
basic information necessary to render an opinion on valuation;
and it shows undue reliance on appraisals performed by third
parties. As a point of fact, one of the appraisals on which
Mr. Alerding purported to rely was merely a draft of an
appraisal, and Mr. Alerding never spoke to the author concerning
the author’s completion of that draft or about any of the
information contained therein.
Mr. Alerding also relied on studies of property that was not
comparable to the subject property in order to form a “benchmark”
on which to base his conclusion concerning the amount of a
marketability discount. He failed to evaluate properly whether
the Decedent's 100-percent interest in CGT merited a premium for
control, or whether such a premium (if one existed) would
neutralize his proffered marketability discount.4 He focused
4 The Court has often determined a control premium in the
case of a majority interest. See, e.g., Estate of Trenchard v.
Commissioner, T.C. Memo. 1995-121, and the cases cited therein.
A control premium reflects a shareholder's ability to control a
corporation through his or her dictation of its policies,
procedures, or operations. Estate of Chenoweth v. Commissioner,
(continued...)
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